Saturday, 02 August, 2025
Bangladesh Bank Governor and economist Dr Ahsan H Mansur has revealed that the central bank is preparing to invite applications for digital banking licences as early as August. “Those who applied previously can reapply. We’ll move swiftly to the selection phase,” he said in a recent interview with a financial daily.
However, a key question remains unanswered: why have no investors yet launched a digital bank, despite similar policies under previous governors? Is it because Mobile Financial Services (MFS) have failed to integrate the wider population into the digital ecosystem necessary for a truly cashless economy?
In a rare admission, the Governor shed light on deep-rooted irregularities at Nagad, a state-backed MFS provider launched unlawfully under the previous Sheikh Hasina regime as part of the Bangladesh Postal Department. “There has been substantial corruption at Nagad,” Dr Ahsan stated. “It operated illegally for years. We resisted issuing a full licence and only granted a temporary one under political pressure.”
The Governor stressed that the Post Office, lacking both financial and technological capacity, was never suited to operate a platform like Nagad. “They can't even manage parcels, let alone a tech platform,” he added.
Legal action is ongoing, and misappropriated funds—over Tk1,700 crore—include money diverted from social safety net programmes. Bangladesh Bank has now regained control after a legal battle with the High Court and is seeking private investors to rescue Nagad’s fragile infrastructure.
Expectations were high that the interim government, led by Nobel laureate Dr Muhammad Yunus, would strengthen the country’s digital journey. While platforms like bKash have gained international praise, providing fast, safe money transfers, bill payments, and remittance services, what is missing is stronger support for MFS and better coordination between banks and fintech.
Instead of collaborating, banks and MFS are increasingly acting as rivals—an emerging friction that now threatens the transition to a cashless Bangladesh.
Globally, countries like Sweden, Denmark, and Thailand have enabled businesses to reject cash, preferring mobile and card-based payments. Digital systems promise speed, transparency, and lower operating costs. Technologies like QR codes and NFC now empower even small vendors to accept digital payments. Globally, over 690 million MFS accounts process more than $1 billion a day.
Bangladesh is no stranger to this progress. With over 30 million mobile money users and bKash ranked second globally among MFS providers, the country has seen rapid growth—MFS transactions have increased annually by 120% since 2011. Debit and credit card adoption is also on the rise.
Still, barriers persist. Only 25% of factories pay wages digitally, compared to 95% in India. Regulatory constraints, poor rural banking infrastructure, and digital exclusion—especially among women, the elderly, and the unbanked—remain major concerns.
Bangladesh Bank has taken steps: removing credit card entry barriers, pushing QR code usage, and promoting financial inclusion through school banking and agent banking. A new requirement mandates that half of all new banking agents must be women, allowing financial access for housebound and rural women. Meanwhile, the government is exploring affordable smartphones in the Tk5,000–6,000 range to bring more people online, with installment plans for easier access.
Despite this, the cash economy is stubbornly resilient. During Eid-ul-Adha, the demand for physical cash spiked by Tk35,000 crore. Around 75% of MFS transactions remain basic cash-in/cash-out activities. Cash still dominates corner stores, rickshaws, and rural markets.
With Tk20,000 crore spent annually on cash handling—including printing, transport, and staffing—officials argue that a digital shift is not just convenient, but essential to curb corruption, tax evasion, and inefficiency.
Bangladesh’s journey to a cashless society is clearly underway, but the road remains long. The potential is vast, the tools are available, but without regulatory reform, investor confidence, and grassroots digitisation, the dream of a truly cashless Bangladesh may remain just that—a dream.
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Bangladesh Bank Governor and economist Dr Ahsan H Mansur has revealed that the central bank is preparing to invite applications for digital banking licences as early as August. “Those who applied previously can reapply. We’ll move swiftly to the selection phase,” he said in a recent interview with a financial daily.
However, a key question remains unanswered: why have no investors yet launched a digital bank, despite similar policies under previous governors? Is it because Mobile Financial Services (MFS) have failed to integrate the wider population into the digital ecosystem necessary for a truly cashless economy?
In a rare admission, the Governor shed light on deep-rooted irregularities at Nagad, a state-backed MFS provider launched unlawfully under the previous Sheikh Hasina regime as part of the Bangladesh Postal Department. “There has been substantial corruption at Nagad,” Dr Ahsan stated. “It operated illegally for years. We resisted issuing a full licence and only granted a temporary one under political pressure.”
The Governor stressed that the Post Office, lacking both financial and technological capacity, was never suited to operate a platform like Nagad. “They can't even manage parcels, let alone a tech platform,” he added.
Legal action is ongoing, and misappropriated funds—over Tk1,700 crore—include money diverted from social safety net programmes. Bangladesh Bank has now regained control after a legal battle with the High Court and is seeking private investors to rescue Nagad’s fragile infrastructure.
Expectations were high that the interim government, led by Nobel laureate Dr Muhammad Yunus, would strengthen the country’s digital journey. While platforms like bKash have gained international praise, providing fast, safe money transfers, bill payments, and remittance services, what is missing is stronger support for MFS and better coordination between banks and fintech.
Instead of collaborating, banks and MFS are increasingly acting as rivals—an emerging friction that now threatens the transition to a cashless Bangladesh.
Globally, countries like Sweden, Denmark, and Thailand have enabled businesses to reject cash, preferring mobile and card-based payments. Digital systems promise speed, transparency, and lower operating costs. Technologies like QR codes and NFC now empower even small vendors to accept digital payments. Globally, over 690 million MFS accounts process more than $1 billion a day.
Bangladesh is no stranger to this progress. With over 30 million mobile money users and bKash ranked second globally among MFS providers, the country has seen rapid growth—MFS transactions have increased annually by 120% since 2011. Debit and credit card adoption is also on the rise.
Still, barriers persist. Only 25% of factories pay wages digitally, compared to 95% in India. Regulatory constraints, poor rural banking infrastructure, and digital exclusion—especially among women, the elderly, and the unbanked—remain major concerns.
Bangladesh Bank has taken steps: removing credit card entry barriers, pushing QR code usage, and promoting financial inclusion through school banking and agent banking. A new requirement mandates that half of all new banking agents must be women, allowing financial access for housebound and rural women. Meanwhile, the government is exploring affordable smartphones in the Tk5,000–6,000 range to bring more people online, with installment plans for easier access.
Despite this, the cash economy is stubbornly resilient. During Eid-ul-Adha, the demand for physical cash spiked by Tk35,000 crore. Around 75% of MFS transactions remain basic cash-in/cash-out activities. Cash still dominates corner stores, rickshaws, and rural markets.
With Tk20,000 crore spent annually on cash handling—including printing, transport, and staffing—officials argue that a digital shift is not just convenient, but essential to curb corruption, tax evasion, and inefficiency.
Bangladesh’s journey to a cashless society is clearly underway, but the road remains long. The potential is vast, the tools are available, but without regulatory reform, investor confidence, and grassroots digitisation, the dream of a truly cashless Bangladesh may remain just that—a dream.
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