Bangladesh Bank Governor Ahsan H Mansur has said that an audit has uncovered financial irregularities amounting to Tk2,300 crore at the mobile financial service provider Nagad.
The governor disclosed irregularities such as the creation of digital money without the requisite approval from the Bangladesh Post Office and the misappropriation of funds meant for government allowances.
Speaking at a seminar titled "Digital Financial Ecosystem: Bridging the Gaps," jointly organised by the Metropolitan Chamber of Commerce and Industry and the Policy Research Institute at Police Plaza in Dhaka on Sunday (12 January), he said, "We have appointed administrators at Nagad to ensure the company operates properly. Consequently, Nagad will be restructured to become a close competitor to the MFS institution bKash."
The BB governor emphasised that financial irregularities worth Tk2,300 crore had been identified in the audit of the institution so far.
He noted, "An audit is ongoing at Nagad. Authorities have already discovered that more digital money has been created than there is physical cash, with an excess of Tk600 crore generated."
Reports of such discrepancies had surfaced earlier, but no action was taken during the previous government. Nagad was among the companies that came into the spotlight for receiving government benefits under the former Awami League government.
Following the government's fall, Dr Ahsan H Mansur, who assumed the role of governor during the interim government, appointed an administrator to oversee Nagad's operations. The central bank subsequently decided to conduct a forensic audit to identify any further irregularities.
According to Bangladesh Bank's policy, MFS institutions are permitted to generate digital money equivalent to the cash deposits held in customer accounts. For instance, if a customer deposits Tk100 in cash, the MFS establishment can create an equivalent amount in digital currency.
The governor also revealed that Nagad had diverted funds intended for various government allowances, including those for the elderly and students' stipends, instead of disbursing them as planned.
He concluded by stating that new investments would be made to strengthen Nagad and ensure its compliance with financial regulations.
