After more than one year of operation as a digital wing of the Bangladesh Post Office, Nagad has received permission to operate as a full-fledged mobile financial services (MFS) provider like bKash and Rocket.
Bangladesh Bank has issued Nagad a licence for an interim period of six months, said a senior official at the payment systems department of the central bank.
"Nagad submitted an application for the licence earlier this month after the central bank instructed banks with mobile financial services to open MFS accounts of garment workers," said Md Mezbaul Haque, general manager of the payment systems department.
"The licence has been issued accordingly," he told The Business Standard.
Tanvir Ahmed Mishuk, managing director of Nagad, thanked the central bank for its quick response that has allowed Nagad to open accounts to send garment workers' wages.
"Now we can handle remittances and maybe there will be interoperability between service providers," Mishuk told The Business Standard.
Nagad is a digital financial services provider that does work similar to bKash and Rocket: cash in, cash out, sending money, bill payments, and mobile recharging. It is owned by the Postal Department of Bangladesh, but runs on a revenue-sharing model – Bangladesh Post Office holds 51 percent and the private sector holds 49 percent.
Nagad has 150,000 outlets and a strong presence at 10,000 post office branches across the country.
On April 6, the central bank asked banks to open MFS accounts for the workers and labourers who have no accounts, by April 20, so that they can receive their wages and allowances during the countrywide shutdown to curb the novel coronavirus spread.
In the meantime, Nagad has opened four lakh new accounts for workers and labourers of the apparel industries, shows data collected from the readymade garments sector.
bKash, of Brac Bank, holds the top position among mobile financial services providers on the basis of account opening. Since April 4, bKash has opened 9.70 lakh accounts as of Saturday.
Rocket stood in second place by opening 5.50 lakh fresh accounts.
In the last 15 days, workers and labourers have opened a total of 19.20 lakh mobile banking accounts to draw wages and allowances from the stimulus fund for the Covid-19 affected export sector.
On April 2, Bangladesh Bank asked banks to submit loan applications, after collecting them from eligible borrower factories, before April 20 – to provide wages and allowances for this month.
Before this, Nagad approached the central bank for approval to operate as an MFS provider but it was denied the permission as it is not a subsidiary of a commercial bank.
On March 5, Bangladesh Bank prohibited banks from making any transaction with unapproved MFS providers, payment service providers and payment service operators.
Nagad was previously operating without central bank approval.