Banks are not allowed to open trust cum settlement accounts (TCSAs) under Nagad Limited unless it gets approval from the postal department and the central bank, the Bangladesh Bank (BB) said in a letter to all the scheduled banks on Thursday.
In banking terms, TCSA means a custody account where the legal tender is stored against the issuance of e-money by a payment service provider (PSP).
The central bank gave the decision after it had found that the mobile financial service (MFS) provider Nagad changed its owning company's name to Nagad Ltd from Third Wave Technologies Ltd several months ago.
Till now, the Bangladesh Post Office (BPO) has no share in Nagad, although it is claiming that Nagad is an entity of the BPO.
Zahidul Islam, head of public relations of Nagad, said changing the company name and opening TCSAs is an ongoing process.
The process would be completed by maintaining regulatory requirements, he added.
In May, the BB issued a guideline for trust fund management in payment and settlement services for MFSs, PSPs, and payment system operators (PSOs) to protect interest of the clients.
The central bank, under the Bangladesh Payment and Settlement Systems Regulations 2014, issued licences to the non-bank entities that desired to provide payment and settlement services in the country.
In the process of facilitating payment and settlement services, these entities hold money that does not belong to them, rather belongs to their customers or payment participants.
A trust fund would comprise any such money that creates a liability of the service providing entity to its customers or participants in the process of mutual business arrangement, said the BB guideline.
The guideline is aimed at protecting interest of the customers, who have a lawful claim on such funds at any point in time, said a senior official of the central bank.
The BB guideline said the money - received by the MFSs, PSPs, PSOs, or any other non-bank entity from its customers or participants for issuing e-money, payment instruments, settlement of transactions, sales proceeds, or any other fund directed by the central bank - would be held in the trust fund.
The MFS, PSP, PSO, or any other non-bank entity that holds the trust fund would open and maintain - subject to the prior approval of the BB - TCSAs with the scheduled commercial banks in Bangladesh, as per the guideline.
