No bar on suing Nagad as new law takes effect
The Bangladesh Bank can now take legal action against mobile financial service (MFS) provider Nagad Limited over alleged irregularities as the Payment and Settlement System Act, 2024 came into effect yesterday.
The Financial Institutions Division of the finance ministry issued a gazette notification on Wednesday, announcing that the new legislation would take immediate effect.
For all latest news, follow The Daily Star's Google News channel. However, a clause and subordinate clause would take retrospective effect, from August 12 last year, said the notification. Those are subsection 4 of section 18 and section 31.
After the interim government came into office, the central bank in August appointed an administrator at Nagad over alleged irregularities in its operations and dealings.
The Financial Institutions Division issued a gazette notification on Wednesday, with parts of it taking retrospective effect
The appointment was made under section 31 of the act, which was passed in parliament in July 2024 but remained ineffective until now.
But as per sub-section 3 of section 1 of the act, the new legislation for fintech companies in the country would only come into effect on a date announced through a gazette.
In absence of the required gazette till now, Nagad raised questions regarding the administrator's appointment.
Against this backdrop, the central bank asked the interim government and Financial Institutions Division to issue the required gazette notification.
A director of Nagad had filed a writ petition to the High Court on September 10, challenging the administrator's appointment.
The High Court subsequently imposed a two-week status quo on all activities of Nagad, preventing the company's administrator and management from taking new steps beyond regular business operations.
The High Court will deliver its verdict on the legality of the administrator's appointment following a hearing scheduled for today.
Nagad had introduced itself as a financial wing of the Bangladesh Post Office when it entered the market in 2019. The company is still operating on a temporary licence from the central bank.
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