Staff Reporter :
Nagad has failed to obtain Bangladesh Bank’s license within the stipulated time as leading banks refused it to form any company with it without major stake.
Failing to form a subsidiary of any bank, Nagad, the claimed digital financial service (MFS) of Bangladesh Post office and owned by a private company-Sigma Group has requested the central bank to extend the validity of temporary license for the next 6 months to continue its operations.
A central bank official has confirmed the Nagad’s third time request to the regulatory authority for allowing it to run MFS operations under the existing company structure, which does not allow Nagad to MFS operations in the highly regulated financial sector.
Nagad authority in the request letter has mentioned that the formation of a bank-led subsidiary company, a mandatory obligation to obtain the BB’s license was not possible due to the ongoing Covid pandemic.
“But the reality is different. Nagad took several initiatives to form a subsidiary with some commercial banks to obtain Bangladesh Bank license. But banks are not responding toNagad’s proposalas the valuation demanded by newly formed NagadLimited is very high and is not acceptable to any bank”, sources in leading commercial banks said.
The central bank issued temporary NOC to Nagad for operating MFS business in line with the Bangladesh Bank’s guidelines. Earlier, the validity time was extended to June 30, 2021.
The prime condition of the BB’s temporary NOC was that Nagad must operate its business under a subsidiary company of a bank as the regulation only allows banks to form subsidiary to provide MFS services.
A Sonali Bank official said both Bangladesh Post Office and Nagad had several discussions with Sonali Bank to form a subsidiary. But the Nagad offer was rejected by the bank’s board.
