‘Nagad ownership crisis may end within a month’

The ongoing ownership crisis of the fastest growing mobile financial service provider ‘Nagad’ might be settled within a month, Postal Department Director General Md Siraz Uddin has said.

“The government is going to form a separate company to operate Nagad,” he told The Business Post after an inter-ministerial meeting on Tuesday.

The Postal Department proposed to rename the MFS provider into Nagad Bangladesh Public Limited Company, said an official requesting not be named.

As per the ownership structure proposal, the Postal Department will own 51 per cent and Third Wave Technologies Limited will hold the remaining 49 per cent of the company’s stake, he said.

To make the process faster and to remove confusion over Nagda’s ownership, the Postal Department has sought opinions from the related public agencies, said the Postal Department’s DG.

To date, the Postal Department has no stake in Nagad but the MFS platform is operating through revenue sharing with it.

The MFS provider is also operating its activities with the central bank interim licence, which will end in March next year.

Representatives from the Posts and Telecommunications Division, the Bangladesh Bank, the Registrar of Joint Stock Companies and Firms, and Third Wave Technologies were present in the meeting.

On September 30, the Bangladesh Bank extended its interim approval for Nagad to March next year and instructed to adjust the bank loans the MFS operator had secured violating rules.

Nagad has been barred from acquiring new merchants until the loans are adjusted, according to a BB letter sent to Nagad.

The BB found that Nagad utilised the customers’ money to take bank loans above Tk 500 crore in violation of the BB rules.

Contacted, Posts and Telecommunications Secretary Md Afzal Hossain told The Business Post, “Third Wave Technologies has taken the bank loans without our permission.”

“We also instructed Third Wave Technologies to adjust the loans by one month but it failed.”

However, the company already adjusted some loans and now the outstanding amount of loans stood at Tk328 crore, he said.

Formally inaugurated on March 26, 2019, the operator in just two and a half years has been able to become the second-largest player in the market overwhelming the Dutch-Bangla Bank’s Rocket.