Bangladesh Bank has expressed serious concern over renewed risks of financial fraud at mobile financial service (MFS) provider Nagad, stating that the central bank currently has no regulatory control over the company.
At a press briefing held on Saturday, Bangladesh Bank spokesperson Arif Hossain Khan revealed that during the tenure of the previous Awami League government, Nagad misused its technology systems to generate Tk 650 crore worth of additional e-money without any real cash backing it. Individuals allegedly involved in this scheme fled the country after the change of government on August 5, 2023—but have now returned and resumed their positions.
Due to the potential financial risk posed to millions of users connected with Nagad, the central bank had initially appointed an administrator and formed a new board to oversee the company. However, the return of former officials led to legal action that resulted in a court ruling—issued after a one-sided hearing—halting the administrator’s activities.
Arif Hossain Khan stated that one of the individuals previously accused in the fraud case has now been reappointed as CEO of Nagad. He was not appointed by the official board but rather by the former CEO who had earlier fled. Since their return, the new management has blocked access for all Bangladesh Bank-appointed personnel, effectively cutting off regulatory oversight and increasing risks for customers.
An audit conducted by international firm KPMG confirmed that multiple irregularities had taken place within Nagad. “A platform handling transactions worth hundreds of crores daily cannot be allowed to operate like this,” said Khan.
He added that while the Bangladesh Post Office was the original license holder for Nagad, they have taken no responsibility for oversight. “Now, a private entity with no accountability to the public is in control again—the same people who were previously accused of financial mismanagement,” he remarked.
A key legal hearing on this issue is scheduled for May 19 before a full bench headed by the Chief Justice of Bangladesh. Arif Hossain Khan emphasized that Bangladesh Bank is not a profit-driven institution, and it had intervened solely to protect public interest and ensure financial security.
But with oversight blocked and regulatory authority removed, he warned that millions of customers are now exposed to significant financial risk.
