The Bangladesh Bank on Tuesday appointed a five-member management board to Nagad, the second largest mobile financial service provider in the country.
The central bank in a letter to the Bangladesh Post Office informed the matter and asked it to follow the instruction.
KAS Murshid, a former director general of the BIDS, will lead the management board.
The board鈥檚 primary responsibility is to outline a future plan and develop strategic management for Nagad, which operates as digital financial service wing of the Bangladesh Post Office.
The board will also provide guidance to the BB-appointed administrator and his team.
Earlier, on August 21, the Bangladesh Bank dissolved Nagad鈥檚 current board of directors and appointed an administrator to manage the MFS.
The BB appointed its director Muhommad Badiuzzaman Dider as administrator to the MFS.
Prior to that, Tanvir Ahmed Mishuk was serving as managing director of both Third Wave Technologies and Nagad.
The administrator was accompanied with six more BB officials for helping his activities at Nagad.
The officials are BB additional director Md Habibur Rahman, joint directors Anwar Ullah, Polash Mondal, Abu Sadat Mohammad Yasin, deputy directors Choyon Biswas and Md Ayub Khan.
Concerns over Nagad emerged when it was discovered that Third Wave Technologies, its technology partner, took a loan of Tk 500 crore from Exim Bank allegedly using Nagad鈥檚 trust fund 鈥� money held in customer accounts 鈥� as collateral.
About Tk 317 crore of this amount remains overdue. When the money was used as collateral for the loan, it created a shortage in Nagad鈥檚 account, meaning Nagad has virtually created more e-money than real money kept in its customers鈥� accounts or 鈥榯rust fund鈥�.
This violated MFS regulations, which require e-money to be backed equally by real money in the customer accounts.
Since its inception, Nagad has faced complications with its licensing.
According to regulations, an MFS company must be a subsidiary of a financial institution or government entity.
However, despite several extensions, Nagad has yet to聽 become a subsidiary of the Bangladesh Post Office or any other institution.
To comply with the rules, Nagad obtained licence for Nagad Digital Bank, under which it would operate as a subsidiary.
The licence was suspended on August 22.