Foreign investors in Nagad Digital Bank under cenbank scrutiny
Four of the five companies in question were registered in 2022 or later
The Bangladesh Bank has sought information on the five US and Singapore-based companies holding 94% of the shares in Nagad Digital Bank PLC including details about the citizenship of the companies' current owners, their registrations, addresses, and other business information, according to sources within the central bank.
On 18 August, the central bank sent a letter to the foreign ministry through the Bangladesh embassies in these countries to verify the information provided by the companies.
Officials from the Bangladesh Bank have indicated that if any discrepancies, inaccuracies, or falsehoods are found in the information provided, the licence for Nagad Digital Bank will be revoked.
The companies in question are US-based Blue Haven Ventures LLC, Osiris Capital Partners LLC, Zen Fintech LLC, Trupay Technologies LLC, and Singapore-based Finclusion Ventures Pte Ltd.
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Documents reveal that four of the five companies in question were registered in 2022 or later.
The Bangladesh Bank has also requested additional information about these companies, including their organisational and ownership structures at formation, business activities, and net profit after tax and net assets for the last three years.
On 3 June this year, the Bangladesh Bank officially handed over the licence to Nagad Digital Bank.
Bangladesh Bank spokesperson Majbaul Haque told TBS that the information of such investing companies is often verified either before or after granting the licence to banks.
"There is a condition that the licence will be revoked if any information is found to be false or incorrect," he said.
He added, "In the past, the licence of Peoples Bank was revoked after verification revealed false information. A similar course of action will be taken if incorrect information is found regarding Nagad Digital Bank."
According to the Bank Companies Act, no individual, family, or company can own more than 10% of a bank's shares, either individually or collectively. However, the government granted an exemption from this provision for Nagad Digital Bank, using special powers upon the request of the Bangladesh Bank.
Registration year and share
According to documents sent to the foreign ministry, Blue Haven Ventures LLC, based in the United States, was registered on 26 July 2022. Osiris Capital Partners LLC and Zen Fintech LLC were registered on 2 August 2022. Additionally, Trupay Technologies LLC was registered in November 2023.
In contrast, Singapore-based Finclusion Ventures Pte, previously named Telekom Asia PTE Ltd, was originally registered in 2011 and changed its name to Finclusion Ventures Pte in 2019.
According to the memorandum of association of Nagad Digital Bank, the company's authorised share capital amounts to Tk500 crore, distributed into 50 crore ordinary shares of Tk10 each, with their respective rights, privileges, and conditions.
The total number of issued shares is 12.50 crore. Three companies hold ownership exceeding the typical 10% limit – Osiris Capital Partners LLC, Blue Haven Ventures LLC, and Finclusion Ventures Pte Ltd.
Osiris Capital Partners LLC, based in the US, holds the largest stake with 6.225 crore shares, representing nearly half (49.80%) of the bank's total shares. Tanvir Ahamad Mishuk, the managing director of Nagad, serves as their representative.
Blue Haven Ventures LLC holds 3.125 crore shares, equivalent to 24.90% ownership. Their representative is Muhammad Farid Khan, a director at Summit Group of Companies.
The Singapore-based firm Finclusion Ventures Pte Ltd owns 1.375 crore shares, translating to an 11% stake in Nagad Digital Bank. Nakib Chowdhury, a Nagad official, represents Finclusion Ventures.
Another US-based company, Zen Fintech LLC, owns 62.5 lakh shares of Nagad Digital Bank, which constitutes 5% of the bank's total shares. Daniel Vincent is the representative of Zen Fintech LLC.
Trupay Technologies LLC holds four crore shares, representing 3.2% of the total shares. These shares are owned by Zerin Ahmed Ankhi, who serves as the company's representative.
Additionally, US-based Farhan Karim Khan owns 62.5 lakh shares, accounting for 5% of the bank's total shares.
On behalf of Fintechtual Holdings Ltd, based in Purana Paltan, Dhaka, Maruful Islam Jhalak owns 12.5 lakh shares in the bank, which is 1% of the total shares.
According to the Bangladesh Bank, digital banks will leverage online technologies such as artificial intelligence, machine learning, blockchain, and other cutting-edge innovations from the fourth industrial revolution. This aims to enhance the financial inclusion programme by offering marginalised populations cost-effective and innovative digital financial products and services.
