Summary:
- Bangladesh Bank uncovered Tk 2,300 crore irregularities in Nagad’s operations, including Tk 600 crore unauthorized e-money.
- Nagad violated regulations by creating e-money beyond permissible limits and misallocating government allowances.
- Governor Ahsan H. Mansur proposed restructuring Nagad’s management and introducing new investments to restore order.
- Investigations and audits are ongoing to determine the full extent of the financial discrepancies and ensure compliance.
Bangladesh Bank Governor Dr. Ahsan H. Mansur has revealed significant financial irregularities amounting to Tk 2,300 crore in the operations of Nagad Limited, a prominent mobile financial service (MFS) provider in Bangladesh. Among these discrepancies, Tk 600 crore was identified as unauthorized electronic money (e-money), created without requisite regulatory approvals. The revelations were made during a seminar titled “Digital Financial Ecosystem: Bridging the Gaps” held on Sunday in Dhaka’s Gulshan area.
Governor Mansur stated, “We have so far uncovered irregularities worth Tk 2,300 crore in Nagad’s operations, including the creation of an additional Tk 600 crore in e-money. Investigations are ongoing to identify further anomalies.” He highlighted that Nagad had violated regulatory guidelines by issuing e-money beyond the permissible limits set by Bangladesh Bank. Under existing rules, MFS companies are required to create e-money equivalent to the cash deposits made by customers. However, Nagad reportedly exceeded these limits.
The investigation also uncovered other serious violations, including the diversion of government allowances meant for beneficiaries under various social safety net programs. These funds were allegedly withdrawn or misallocated instead of being distributed to intended recipients. Governor Mansur emphasized that an audit is underway to determine the full extent of these irregularities.
The findings have sparked concerns about governance and accountability within Nagad. The company, which began operations on March 26, 2019, in partnership with the Bangladesh Postal Department, has faced scrutiny since its inception over its regulatory compliance and operational practices. Despite receiving a digital banking license during the previous government’s tenure, questions about its financial management persist.
The governor suggested that restructuring Nagad’s management and bringing in new investments could help restore order and enhance its competitiveness against market leader bKash. He also hinted at appointing an administrator to oversee the company’s operations and ensure compliance with regulatory standards.
The irregularities at Nagad come at a time when digital financial services are playing a pivotal role in advancing financial inclusion in Bangladesh. Platforms like Nagad and bKash have been instrumental in extending banking services to underserved populations across the country. However, incidents like this underscore the need for stricter oversight and robust governance frameworks to safeguard public trust and ensure sustainable growth in the sector.
This development also raises broader questions about regulatory enforcement in Bangladesh’s rapidly evolving digital financial landscape. Experts have called for enhanced cybersecurity measures, forensic audits, and stricter penalties for non-compliance to prevent similar incidents in the future.
As investigations continue, stakeholders await further updates from Bangladesh Bank on potential legal actions and reforms aimed at addressing these issues.
Source: Ittefaq
