HC questions the validity of Nagad’s licence
Staff Reporter :
The High Court has questioned the legality of the business operation of the Nagad Limited, a mobile financial service (MFS) provider.
It has issued a rule upon the concerned bodies of the government to explain in four weeks as to why the operation of the Nagad Limited since inception of its business in 2019 as an MFS provider with temporary approval from the Bangladesh Bank should not be declared illegal.
In the rule the High Court also wanted to know from the respondents to explain as to why the Bangladesh Bank should not be directed to cancel its temporary approval which was granted illegally in favor of Nagad Limited allowing the entity to run its business as an MFS provider in violation of the laws.
Finance Secretary, Bangladesh Bank Governor, Director General of the Payment System Department (PSD) of the central bank, Director General of the Bangladesh Post Office, Managing Director of the Nagad Limited and other respondents have been asked to comply with the rule.
The High Court bench of Justice Md Mozibur Rahman Miah and Justice Kazi Md Ejarul Haque Akondo passed the order after hearing a writ petition filed challenging the legality of the Nagad Limited’s business.
Two Supreme Court lawyers, Md Abu Bokkor Siddik and Md Hasan Uz Zaman, filed the petition as a public interest litigation on October 27.
Lawyer Kamal Hossain Meahzi appeared in the court hearing on behalf of the petitioners, while Attorney General AM Amin Uddin and Deputy Attorney General Arabindo Kumar Roy represented the state.
Later Kamal Hossain Meahzi said, “Nagad incepted its business in 2019. As per Bangladesh Mobile Financial Service (MFS) Regulations, 2018, a MFS provider has to be affiliated with the scheduled banks, and the concerned bank must have share minimum 51 percent in the MFS providing entity.
When the Nagad incepted its operation in 2019, then the regulations of 2018 was in force. However, violating the regulations the Bangladesh Bank granted permission to Nagad.
In 2022, the MFS Regulations of 2018 were repealed and new regulations were made. It is said that any bank, financial institution and government institution can apply for MFS license.
Nagad has been claiming since the beginning of their business operations that they are a subsidiary of the Department of Posts. But after reviewing the documents of the Registrar of the Joint Stock Companies and Firms, it was confirmed that the Bangladesh Postal Department does not have any shares in that company.”
The lawyer further said Bangladesh Bank gave a temporary license to the Nagad on request of the Bangladesh Postal Department which is not lawful according to the Regulations of the 2018 and 2022. That is why the petitioners filed the writ petition, he added.
