Bangladesh Finance and PalmPay Partner to Revolutionize Digital Loans

Bangladesh Bank has barred fund transfers via Nagad through banks, though its mobile financial services remain operational. The move aims to protect customers’ funds amid legal disputes. A High Court stay has halted the central bank-appointed administrator's duties, allowing a fraud-accused former director to act as CEO.

Bangladesh ranks among countries with the widest gender gap in mobile money usage, with a 56% gap, following Pakistan's 71% and ahead of India's 51%. According to the GSMA's "State of the Industry Report on Mobile Money 2024," women's awareness of mobile money in Bangladesh increased from 61% in 2022 to 72% in 2023, while men's awareness grew from 74% to 81%.

The Bangladesh House Building Finance Corporation (BHBFC) has increased interest rates on all types of housing loans by 1%, effective from January 1, 2024. The new rates range from 8% to 10%, up from the previous 7% to 9%.

Contactless payments in Bangladesh doubled in 2024, reaching 13% of all Visa transactions, with domestic contactless payments tripling due to increased credit and debit card usage. Visa recorded a 14% rise in overall spending and a 17% increase in transactions compared to 2023, driven mainly by online payments.

The launch of digital banks in Bangladesh remains stalled despite initial excitement. Nagad Digital Bank, the sole licensee, missed its December 2024 deadline to start operations due to regulatory delays. Bangladesh Bank received 56 applications, issued letters of intent to two companies, and licensed Nagad Digital Bank in June 2023 with a required Tk 1.25 billion in paid-up capital.

The Payment and Settlement System Act, 2024, now in effect, enables Bangladesh Bank to pursue legal action against Nagad Limited over alleged operational irregularities. A gazette notification issued by the Financial Institutions Division formalized the legislation, granting certain clauses retrospective effect from August 12, 2023.