An extension from the Bangladesh Bank on the interim approval of Nagad has been applied by the Directorate of Posts for six months until December 2021.
The government is in the process of making Nagad a subsidiary of the Directorate of Posts, however, some long-term problems, such as amending the law and approval of the prime minister is necessary in this regard.
An official stated that this is the reason why the Directorate of Posts has recently applied for a 6-month extension of its no-objection period to the Bangladesh Bank.
Previously in this month, the Posts and Telecommunications Division has held meetings on this topic in presence of top-level representatives of Bangladesh Bank and the Ministry of Finance.
Chaired by the Secretary of the division Md Afzal Hossain, it was decided to apply for an extension of time.
Sources from the meeting stated that it would take some time to complete the formation of the subsidiary company because of the pandemic.
The officials have stated that the memorandum of association, article of association, and vendor agreement have already been drafted to form the subsidiary company and it is awaiting final approval from the government.
The temporary approval given by the central bank for Nagad’s operations would expire on June 30. In that case, to keep Nagad’s services in operation for its more than 50 million customers, it was decided for an application of extension with the consent of all the members of the meeting.
Md Serajul Islam, spokesperson and an executive director of Bangladesh Bank, said that they are reviewing the appeal for a time extension of Nagad.
“If Nagad complies with the given conditions, then their prayer for time extension would be considered,” he added.
Innovative and affordable from the beginning of their operation, Nagad has gained in excess of 50 million customers in just 2 years and secured its position as a second player of this kind in the country.
With the introduction of the electronic Know Your Customer (e-KYC), Nagad has made huge strides in the financial sector of Bangladesh while the inception and later the innovation of the digital account opening process only by dialling *167# from any phone with the partnership of mobile telecom operators of the country.
As of right now, on average more than Tk 650 crore is being transacted per day through Nagad.
In addition to that, in situations like the pandemic, the mobile financial service (MFS) operator has responded by distributing government social security program allowances and other government assistance. It has also changed the landscape of the government assistance disbursement process.
As of right now, 16 MFS carriers are operating the service in Bangladesh, though the total number of licences have reached 30.
Dutch Bangla Bank Limited introduced this payment procedure in the country in 2011, now rebranded as Rocket. Later, bKash, the leading carrier, also joined as an MFS.