Bangladesh Bank Signals Possible Return of Its Administrator at Nagad

Bangladesh Bank Governor Mostakur Rahman has indicated the possibility of recalling the central bank-appointed administrator currently overseeing mobile financial service (MFS) provider Nagad. However, relevant officials said the ownership and operational responsibility of the institution will remain with the Bangladesh Post Office. According to Bangladesh Bank, irregularities by other ownership stakeholders outside the postal department have caused the company’s net assets to turn negative, leaving them with no scope to return to management.

The matter was clarified during a meeting between the Nagad administrator team and the governor at Bangladesh Bank on Wednesday, March 4, said central bank spokesperson Arif Hossain Khan. He noted that during the meeting the governor conveyed to Nagad’s current administrator and Bangladesh Bank Director Md. Motasem Billah that it is not appropriate in the long term for a central bank official to serve as an administrator in another institution. In response, the administrator said he had been assigned the responsibility by the central bank and would return if called back when necessary.

The spokesperson further said that a special inspection at Nagad uncovered extensive irregularities. Members of the previous board of directors are currently absent. Since the institution is owned by the postal department, it will continue to operate it. If necessary, the postal department may also decide to transfer ownership to a new investor.

He added that Nagad has not yet received a full license from the central bank and is operating under an interim license. The administrator was appointed to ensure the safety of transactions for approximately 40 to 50 million customers. In such a situation, Bangladesh Bank believes that all necessary steps will be taken to protect customer interests and maintain financial stability. Even if the administrator is withdrawn, regulatory oversight will continue.

Notably, following the fall of the Awami League government in the student–public uprising on August 5, 2024, Bangladesh Bank decided on August 21 to appoint an administrator at Nagad. Initially, on August 22, Bangladesh Bank Director Muhammad Badiuzzaman Dider was appointed as administrator. After the appointment, a central bank inspection team and a forensic audit conducted by international audit firm KPMG revealed serious fraud.

The inspection found evidence of financial fraud through fictitious distributors and agents, as well as the creation of excess e-money without authorization. In total, discrepancies amounting to Tk 2,356 crore were identified. Additionally, evidence showed that Tk 1,711 crore, intended for the distribution of government allowances, had been withdrawn by opening 41 distributor accounts without approval.

Under such circumstances, Bangladesh Bank announced in June last year that Nagad had issued at least Tk 645 crore in additional e-money without depositing actual funds, causing substantial financial losses to the government.

Following August 5, Nagad’s then Chief Executive Officer Tanvir Ahmed and several top officials went into hiding. As they remained absent, after the administrator assumed charge on August 21, CEO Tanvir Ahmed, Executive Directors Niaz Morshed (Elit) and Maruful Islam (Jhalak), Deputy Chief Marketing Officer Khandaker Mohammad Solaiman (Solaiman Sukhan), and Human Resources officer Anik Barua, among others, were dismissed. Many of the dismissed officials were also linked to the institution’s ownership.

Subsequently, after the administrator was appointed at the MFS provider, Bangladesh Bank’s then Governor Ahsan H. Mansur said Nagad had created e-money illegally. The institution generated approximately Tk 630 crore in excess e-money, meaning it did not receive actual funds. However, it still had access to cash and used the e-money to pay salaries, bonuses, travel expenses, and other operational costs. The interim government has been working through a G2G management system to seize the funds.

DBTech/DHE/MUM/OR