Bangladesh Bank governor flags irregularities worth Tk 23bn at Nagad

Irregularities such as creating e-money without approval, removing money from the government allowances have been found, he says

Bangladesh Bank Governor Ahsan H Mansur has said an audit unearthed information about financial "irregularities" worth Tk 23 billion at Nagad.

He brought to light irregularities of the mobile financial service, or MFS, provider such as creating digital money without the approval of the Bangladesh Post Office and removal of money without disbursing government allowances.

While speaking at the seminar titled "Digital Financial Ecosystem: Bridging the Gaps" jointly organised by the Metropolitan Chamber of Commerce and Industry and Policy Research Institute at Police Plaza in Dhaka on Sunday, the governor said: 'We have appointed administrators in Nagad, they are working to properly run the company.

For this, Nagad will be restructured as the closest competitor to MFS institution bKash.”

The governor said financial irregularities worth Tk 23 billion have been found so far after conducting an audit at the institution.

Noting the irregularities, he said: “An audit is under way at Nagad. The authorities have already found that more digital money has been created than physical money. An additional Tk 6 billion has been created.

The reports of allegations of creating e-money against Nagad also appeared earlier. Discussions were held about this in the financial sector, but no action was taken during the previous government. It was also among the companies that came into the limelight for having government benefits during the tenure of the ousted Awami League government.

After the fall of the government, Ahsan, who took over as the new governor of Bangladesh Bank during the interim government, appointed an administrator to look after the MFS company.

The central bank later said it had decided to conduct a "forensic" audit to check if there were any "irregularities”.

According to the central bank’s policy, MFS institutions will be able to generate digital money equivalent to the amount deposited in cash in the accounts of customers. For example, if a customer deposits Tk 100 in cash, an MFS establishment will be able to generate an equivalent amount in digital money.

The governor also said that Nagad had diverted instead of disbursing the money of various government allowances, such as old age and stipends.

New investments would be made to strengthen the company, the governor said.