Mobile Money Misgivings: TIB Exposes Costly, Corrupt Practices in Bangladesh’s MFS Sector
Mobile Financial Services (MFS) in Bangladesh cost users 7 to 15 times more than traditional banking, according to a new report released by Transparency International Bangladesh (TIB). The report also highlights that MFS service charges in Bangladesh are considerably higher than those in neighboring countries.
Titled “Challenges of Good Governance in Mobile Financial Services and the Way Forward,” the study reveals that MFS users pay between BDT 200 to 462 per BDT 25,000 cash-out transaction, whereas banks charge a maximum of BDT 29 for the same. For a 'send money' transaction, MFS providers charge up to BDT 150 per BDT 25,000, while bank transfers are free of cost. In 2024 alone, MFS users paid between BDT 4,410 crore to BDT 10,197 crore in cash-out fees. In comparison, banks earned just BDT 639 crore from similar services. TIB asserts that these MFS charges are “abnormally high” by international standards.
The report was unveiled at a press conference held Tuesday at the TIB office in Dhanmondi, Dhaka. TIB Executive Director Dr. Iftekharuzzaman presided over the event, which was also attended by Executive Management Advisor Professor Dr. Sumaiya Khair and Director of Research and Policy Muhammad Badiuzzaman. The report was presented by TIB Research Fellow Mohammad Nure Alam and Research Associate Kazi Aminul Hasan.
Dr. Iftekharuzzaman stated, “Fraud, bribery, online gambling transactions, and alarming levels of money laundering using MFS platforms have surfaced in the study. Approximately 1,100 MFS agents were found to be involved in online gambling transactions. In 2022 alone, nearly BDT 75,000 crore was laundered via MFS.”
He added, “Following the fall of the authoritarian government, Bangladesh saw a record increase in remittance during the 2024-25 fiscal year. One key factor was the restriction of illegal hundi transactions through MFS.”
The report notes that users of bKash, Bangladesh’s leading MFS provider, pay between BDT 372.50 to BDT 462.50 for withdrawing BDT 25,000. In comparison, Pakistan’s EasyPaisa charges BDT 355.70, Myanmar’s Wave Pay BDT 231.30, and India’s PhonePe charges no service fee for similar transactions.
According to Dr. Iftekharuzzaman, “Political elites have manipulated the regulatory authorities to dominate the MFS sector. The platform ‘Nagad’ received unethical advantages. This sector has been used not only for economic exploitation of the public and misappropriation of state funds but also for bribery and money laundering.”
He further revealed that Third Wave Technologies, the contracted operator of Nagad, created an additional BDT 645 crore in e-money in violation of regulations. The study also uncovered misuse of government allowances, irregularities in the inter-transaction platform (Binimoy), and cases of foreign currency laundering through the platform. “A total of BDT 2,356 crore has been laundered abroad by Nagad’s shareholders,” he stated.
To address the governance challenges in the MFS sector, TIB has proposed a 13-point set of recommendations. These include enacting a dedicated law for MFS, reducing transaction costs, improving interoperability with financial institutions, aligning operational frameworks with global best practices, setting commission caps for agents and distributors, and strengthening regulatory oversight.
