The Bangladesh Bank has awarded a licence to Nagad Finance PLC, allowing the firm to perform as a non-bank financial institution (NBFI). Nagad got the licence on May 14 under section (1) 4 of the Financial Institutions Act, 1993.
The new financial institution will run its operations from the Delta Dahlia Tower on Kamal Ataturk Avenue in the city’s Banani area. Before the move, the central bank board of directors at its 427th meeting had decided to give approval to the company on April 3 this year.
With Nagad Finance, the total number of NBFIs in the country now stands at 36. The regulator awarded a licence to the company at a time when most of the NBFIs are in dire straits due to huge loans irregularities and scams.
A senior official at the central bank, on condition of anonymity, said, “Nagad Ltd, which is now operating the mobile financial service (MFS) window of Bangladesh Post Office, will run a MFS under the new NBFI. The MFS will act as a subsidiary of Nagad Finance.
Muhammad Farid Khan, vice-chairman of the Summit Group of Companies, is chairman of the seven-member board of Nagad Finance. MFS provider Nagad Managing Director Tanvir A Mishuk is also a director of the new NBFI.
In response to a query, Mishuk said, “We are going to start our operations after Eid Ul Azha. The NBFI has the vision to bring lower-income people from the informal to the formal financial sector by providing relevant services.
“As part of the initiative, we will hand out micro-loans with a single-digit interest rate. In case of deposit mobilisation, we will receive a small amount of deposit to help the middle and lower segment of the population.”
The new NBFI is yet to appoint any managing director to the company.
Nagad is still operating MFS services without a central bank licence, but Mishuk expects that the MFS will get this licence from the central bank under the new NBFI soon. The firm's investors have plans to launch a digital bank in the coming days.
