TL;DR
- Bangladesh Bank has suspended Nagad’s digital banking license pending a comprehensive review of the licensing process.
- Allegations suggest Nagad obtained its license by bypassing rules with help from influential figures linked to the previous government.
- An administrator has been appointed to oversee Nagad’s operations during the suspension period.
- The central bank aims to ensure Nagad becomes a transparent and compliant institution, similar to bKash.
Bangladesh Bank has suspended the digital banking license of Nagad Digital Bank PLC, a decision announced by the central bank’s governor, Dr. Ahsan H Mansur, on Thursday. This suspension comes as part of a comprehensive review process to ensure compliance with regulatory standards. Dr. Mansur stated that the Nagad digital banking licence has been put on hold while a thorough review is conducted, and if they qualify as per the central bank’s review process, they will receive the licence.
The central bank’s decision follows the appointment of Muhammad Badiuzzaman Didar as the new administrator for Nagad. Didar was previously a director at the Bangladesh Bank’s Chattogram office. Dr. Mansur explained the rationale behind the move, saying that the institution has been taken under the Postal Department as they were presenting Nagad as an entity of the department. He further added that the goal is to establish a robust framework for Nagad, similar to that of bKash.
Nagad Digital Bank was granted final approval for its digital banking license on June 3, making it Bangladesh’s first digital bank. The company initially sought the license in 2020. However, there have been allegations that Nagad obtained the license by bypassing existing rules, allegedly due to interventions by two influential figures associated with the recently ousted Awami League-led government.
The suspension of Nagad’s license highlights the central bank’s commitment to ensuring that digital banking entities operate within a stringent regulatory framework. This move aims to safeguard the financial system’s integrity and maintain public trust in digital financial services. The outcome of the central bank’s review will determine whether Nagad can resume its digital banking operations under the revised regulatory conditions.Bangladesh Bank Suspends Nagad Digital Banking License
