The posts and telecommunications ministry and Nagad Limited have expressed differing opinions over profit sharing of the mobile financial service operator once its shares are transferred to the government.
The question of transferring the shares of Nagad to the government surfaced as part of the MFS operator’s move to get licence from the Bangladesh Bank.
Nagad Limited, previously Third Wave Technologies Limited, has been operating as an MFS after winning a tender of the Bangladesh Post Office under the revenue sharing model.
Under the model, the Bangladesh Post Office receives 51 per cent of all revenues generated against MFS operations without making any investments or holding shares in Nagad.
To acquire the central bank’s approval like other bank-led MFS operators, Nagad will have to transfer 51 per cent of its shares to the government.
Nagad has received the no-objection certificate from the BB and was supposed to complete all the BB’s requirements, including formation of a company where 51 per cent stake of the Bangladesh Post Office must be ensured to get the final approval.
Due to delays made by Nagad in fulfilling the BB’s conditions, the central bank, following prayers received from the Department of Posts, has extended the validity of its NOC to Nagad until June 30, 2021.
Asked about the delay in fulfilling the conditions of the central bank, Nagad managing director Tanvir Ahmed Mishuk said at a discussion with journalists on Tuesday that the government had been considering that the holding shares of Nagad came with the responsibility of incurring losses along with gaining profit.
The government along with the finance ministry might be in a process of assessing the risk factors along with taking permission from the competent authorities and that’s why it’s taking some time to complete the process of transferring shares to the government, the managing director said.
Asked about the government’s stance about Nagad’s profit and loss sharing after the transfer of shares to the government, Posts and Telecommunications Division secretary Md Afzal Hossain told New Age, ‘Even after the transfer of shares to the government, Nagad will have to share revenue with the government as per the initial memorandum of understanding.’
‘We would not either take share of profit or losses as otherwise manipulations could occur,’ Afzal said.
The Posts and Telecommunications Division is under the posts and telecommunications ministry.
The ministry would not change its stance in this regard, the secretary said.
Asked whether the government will have to invest any money in Nagad for the share acquisition, he said that the government will not make any investment.
The reputation of the government along with the platforms of the post office would be used as its investments and the rest would be fulfilled by the Third Wave Technologies Limited (now Nagad Limited), said Afzal.
He also expected that all the procedures to acquire the shares of Nagad would be completed by the BB-set NOC timeframe of June 30, 2021.
At the discussion with the journalists, Nagad chief executive officer Rahel Ahmed that Nagad’s market share reached between 32 per cent and 35 per cent in March.
The operator’s subscriber base reached Tk 3.8 crore in March from 2 crore in November 2020. The operator’s daily transaction increased to around Tk 400 crore in March from Tk 150 crore in November.
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