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Nagad Finance PLC has received a licence from the Bangladesh Bank (BB) to operate as a new non-bank financial institution (NBFI) in the country, according to a circular issued by the central bank.
Nagad Finance PLC is a strategic business unit of Bangladesh Post Office's digital financial service provider.
The order, signed on Wednesday by BB Deputy Governor Ahmed Jamal, said that Nagad Finance PLC has been permitted to engage in financing business in Bangladesh.
However, Nagad Finance PLC is a separate organisation in which the Bangladesh Post Office has no stake, as it did not have equity participation.
Meanwhile, it has been learned that the new NBFI may commence operations on July 1 this year. Earlier, the BB Board approved Nagad as an NBFI.
Non-Bank Financial Institutions (FIs) are financial institutions regulated under the Financial Institution Act-1993 and controlled by the Bangladesh Bank. Currently, 35 FIs are operating in Bangladesh.
The paid-up capital of the NBFI is Tk 1.0 billion, with an authorised capital of Tk 5.0 billion.
Previously, the BB board issued a letter of intent against Nagad Finance PLC.
Muhammad Farid Khan, vice-chairman of Summit Group, will serve as the chairman of the NBFI, which will be headquartered in the city's Banani area on Kamal Ataturk Road.
Mr Tanvir A Mishuk, managing director of Nagad, is also a director of the proposed NBFI.
However, Nagad Finance PLC will promote its products and services through Nagad Limited.
Together, Nagad Finance PLC and Nagad Limited will work to bring the underserved into the fold of digital financial inclusion. Nagad has been operating under a temporary MFS licence since 2019 through a service agreement with the Bangladesh Post Office. The relationship between Nagad and the Post Office is solely based on revenue sharing under the service agreement.