Nagad Finance Achieves NBFI License
On Wednesday, the Bangladesh Bank issued a license to Nagad Finance PLC, authorizing its operation as a non-bank financial institution (NBFI) within the country.
This development was announced through a circular released by the central bank, citing the provision of the NBFI license to Nagad Finance under the authority of section 4(1) of the Financial Institution Act, 1993.
With the inclusion of Nagad Finance, the total count of NBFIs in the country has now reached 36.
This decision follows the Bangladesh Bank’s earlier resolution on August 30, 2022, wherein they issued a letter of intent to Nagad, a mobile financial service provider affiliated with the Bangladesh Post Office, granting it an NBFI license.
This newly obtained license enables Nagad to establish a subsidiary, formalizing its mobile financial services (MFS) operations.
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As per regulations, an MFS company must be a subsidiary of a financial institution or government entity, similar to bKash, which is a subsidiary of BRAC Bank Limited.
By establishing the subsidiary, Nagad will acquire a full license from the Bangladesh Bank to operate its MFS services.
This transition implies that Nagad will no longer function as a government service but will operate as a private MFS provider, akin to other similar entities.
Since 2019, Nagad has been operating under a temporary MFS license via a service agreement with the Bangladesh Post Office.
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