Business Desk :
Nagad, a digital mobile financial service provider, has got six more months – fifth time in a row – to fulfil the conditions of the central bank for the latter’s final approval.
The MFS provider, which is in operation as a joint venture of Bangladesh Post Office and Third Wave Technologies Limited, was renamed Nagad recently.
The development comes after the postal department applied to the Bangladesh Bank for an extension of Nagad’s temporary approval, which expired on September 30.
The central bank has extended the six-month interim approval for Nagad till March 31 next year, said Bangladesh Post Office Director-General Md Siraz Uddin.
“On Thursday (Sep 30) we received the central bank letter in this regard,” he told The Business Post.
Asked why the MFS provider was unable to fulfil the BB conditions so far, the high-up suggested that an individual company formation for Nagad is now underway, which is the reason behind the delay.
“When the government formed a company, opinions and vetting from several ministries and departments are required,” he pointed out.
The central bank on Thursday extended the validity of the No Objection Certificate (NOC) for the continuation of Nagad’s operations as the MFS operator and the postal department failed to fulfil the licencing conditions during the previous timeframe, a high official said, seeking anonymity.
The BB in its NOC asked the Bangladesh Post Office to take over the authority of Nagad’s trust-cum-settlement account from Nagad Limited to protect the customers’ interest.
According to Md Siraz Uddin, Nagad is now operating the trust-cum-settlement account under its old identity because Bangladesh Post Office has no ability to operate such an account right now.
“An individual company formation process is underway incorporating Bangladesh Post Office. Once the process is completed, the account will be maintained by the company itself,” explained the director-general of Bangladesh Post Office.
Nagad applied for the NOC to the central bank early last year after launching its services on March 26, 2019, as a service-providing wing of Bangladesh Post Office without obtaining a licence or NOC from the central bank.
On March 5 last year, the central bank asked the banks to suspend the trust-cum-settlement accounts of companies that were providing MFS and digital wallet services without its approval.
Nagad was the only MFS provider running without the BB approval then.
Several banks froze accounts belonging to Nagad, making it difficult for the company to operate.
This compelled the company, which until then was operating under the Post Office Act 1898 and not as per the central bank’s MFS regulations, to seek out a full-fledged licence from the BB.
Formally inaugurated on March 26, 2019, the operator in just two and a half years has been able to become the second-largest player in the market overwhelming the Dutch-Bangla Bank’s Rocket.
Nagad’s final approval would take the tally of MFS licences to 16.
