Bangladesh Bank Probes DGiPay’s PSO Licence

Bangladesh Bank has launched an investigation into the Payment System Operator (PSO) licence of online payment gateway provider DGiPay Services Limited following concerns over security risks and allegations of server access from India. On October 29, the central bank disconnected the company from the National Payment Switch Bangladesh (NPSB), while its final decision on the licence will depend on the outcome of the investigation.

According to sources concerned, a Bangladesh Bank team conducted an audit at DGiPay’s office on October 29 and spoke with the company’s officials after completing the inspection. The decision to disconnect the company from NPSB was taken afterwards. The regulator has also initiated an investigation into the company.

Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said the central bank had received various allegations against the company. In the circumstances, he said, the regulator did not consider it safe to keep the company connected to the national transaction system. An investigation has begun, and a final decision on its licence will be made after the process is completed.

However, DGiPay Managing Director and Chief Executive Officer Rashed Mahmud said he was not aware of receiving any formal letter or instruction from Bangladesh Bank regarding the disconnection from NPSB. He said the company learned about the matter through media reports and that the central bank had not formally informed them during or after the audit. Other services provided by the company, excluding NPSB-based transactions, remain operational, he added.

Rashed Mahmud said Bangladesh Bank’s concerns primarily involved the activities of the company’s development team based in India. After visiting the office on October 29, the central bank’s audit team spoke with mid-level officials. At the time, work was underway to upgrade and transfer the company’s system, for which an Indian company had been engaged as a vendor.

According to him, the development team of the vendor needed a minimum level of access to carry out the system upgrade. He described the access as part of an ongoing process.

The DGiPay CEO also said Indian vendors are involved in technical operations at various public and private banks in Bangladesh, including Bangladesh Bank. However, following the regulator’s concerns, the company had taken necessary steps. He said they took over responsibility for the system and completed the handover process from the India-based development team on Monday night. He claimed this had addressed the central bank’s concerns, although the ongoing development work has been suspended for the time being.

The National Payment Switch Bangladesh, operated by Bangladesh Bank, is a central payment network that connects banks and financial institutions for real-time digital transactions. It facilitates interbank transactions across the country.

DGiPay Services Limited received a Bangladesh Bank licence as a Payment System Operator in August 2023. The company currently provides services to between 600 and 1,000 merchants on a regular basis. DGiPay is a subsidiary of Dipon Group.

Following its disconnection from NPSB, the company’s NPSB-dependent transaction services have been suspended. However, its other services remain operational, according to the CEO. The central bank’s final decision on the company’s PSO licence will be made after the investigation.

//DBTech/BTRN/SMP/MVNO//