Summary:
- Nagad Limited dismissed 41 distributors, 24,097 agents, and 643 sales officers following allegations of issuing Tk 645 crore in unauthorized e-money and withdrawing Tk 1,711 crore through unapproved distributors.
- The alleged financial misconduct, described as one of Bangladesh’s largest digital frauds, has sparked a jurisdictional dispute between the Bangladesh Bank and Directorate of Posts over filing legal action.
- Investigations revealed misuse of government allowances and unclaimed beneficiary funds, prompting a forensic audit to uncover further irregularities and identify those responsible.
- Despite the scandal, Nagad’s daily transactions exceeded Tk 1,000 crore in November under central bank oversight, with its customer base growing to over 9.5 crore users.
Dhaka—Nagad Limited, one of Bangladesh’s leading mobile financial service (MFS) providers, has come under intense scrutiny following allegations of significant financial irregularities. The company, which operates under the Bangladesh Post Office, has been accused of creating unauthorized electronic money and engaging in large-scale digital fraud. This has led to the dismissal of 41 distributors, 24,097 agents, and 643 sales officers by an administrator appointed by the Bangladesh Bank.
The controversy stems from findings that Nagad issued Tk 645 crore worth of electronic money beyond the cash reserves deposited in banks. Additionally, unauthorized distributors allegedly withdrew Tk 1,711 crore from the system. These distributors were primarily responsible for disbursing government allowances, raising concerns about potential misuse of public funds. Despite these revelations, no legal action has been initiated as the Bangladesh Bank and Directorate of Posts remain locked in a dispute over jurisdiction.
The irregularities were uncovered after the fall of the Awami League government in August 2024. On August 21, the central bank appointed Muhammad Badiuzzaman Didar as an administrator to oversee Nagad’s operations. Subsequent investigations revealed what is being described as one of the largest digital financial frauds in Bangladesh’s history. The administrator has recommended disciplinary action against six senior officials and urged a forensic audit to identify further discrepancies and those responsible.
Nagad’s rise to prominence began in March 2019 when it launched under a temporary license from the Bangladesh Bank. The service quickly gained traction due to its association with influential figures linked to the previous government. This affiliation reportedly allowed Nagad to secure exclusive contracts for distributing government stipends and other benefits without competitive bidding processes. However, these privileges also facilitated alleged financial misconduct, including withdrawing unclaimed funds from beneficiary accounts.
The fallout from these allegations has been significant. In addition to dismissing thousands of personnel, Nagad has suspended 3,831 merchant accounts and frozen improperly opened customer accounts pending verification. The company now faces a forensic audit ordered by the central bank to thoroughly examine its financial records and uncover any criminal activities.
Despite these challenges, Nagad’s daily transactions have surged since the appointment of the administrator. From Tk 743 crore in August, daily transactions rose to over Tk 1,000 crore by November. The company’s customer base has also expanded to over 9.5 crore users. A senior official at Nagad attributed this growth to increased trust in the company’s operations under central bank oversight.
The situation remains complex as Nagad navigates both internal reforms and external investigations. While an independent audit conducted earlier cleared Nagad of wrongdoing, questions persist regarding its past practices and governance. The outcome of the forensic audit will likely determine the company’s future trajectory and its ability to restore public confidence.
As regulatory bodies deliberate on legal actions and reforms, Nagad’s case underscores the need for stringent oversight in Bangladesh’s rapidly growing digital financial sector.
Source: Prothom Alo
