BB gives approval to Nagad for Interoperable Payment System
A senior official of the Bangladesh Bank confirmed the development to The Business Standard, saying the approval was issued last week
Mobile financial service (MFS) provider Nagad has received the final approval from the Bangladesh Bank to operate its interoperable payment system.
A senior official of the Bangladesh Bank confirmed the development to The Business Standard, saying the approval was issued last week.
"The Bangladesh Bank has approved Nagad for operating the interoperable payment system. Hopefully, Nagad may start its interoperable services from January," the official said.
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The central bank introduced the long-awaited interoperable payment system on 1 November, aiming to facilitate seamless digital transactions across platforms. However, at the time of launch, Nagad had not received regulatory approval, while market leader bKash also stayed out of the system.
Ahead of the launch, bKash sent a letter to the central bank on 30 October, stating that it could not ensure full security for integration with the National Payment Switch Bangladesh (NPSB). The company requested time until 31 January to join the system.
A senior central bank official said the Bangladesh Bank faced an awkward situation due to bKash's last-minute decision, as the company dominates the MFS market.
The interoperable payment system allows instant transfers between mobile wallets, bank accounts, non-bank accounts, and institutional accounts. Another Bangladesh Bank official said the initiative is part of the regulator's broader effort to promote a cashless society.
"Market-leading MFS providers should join the interoperable system to boost digital transactions in the country," the official said.
Officials also noted that the system would struggle to gain popularity without the participation of major players such as bKash and Nagad.
Nagad has been operating under Bangladesh Bank's administration since August last year following a regime change.
Previously, the service was excluded from interoperability on the grounds of not holding a approval, raising questions about how the central bank was overseeing its operations.
Bangladesh Bank has formally enabled account-to-account interoperability through NPSB by updating its regulatory framework to include banks, MFS providers, microfinance institutions, and payment service operators. The system now supports real-time clearing and multi-party settlement.
Despite regulatory preparedness, adoption of interoperability through NPSB has been slow, as providers remain concerned about high integration costs and unclear commercial benefits.
