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'Nagad' set to complete its first yr of existence

FE REPORT | March 25, 2020 00:00:00

Bangladesh Post Office's easy, safe, timely and cost-effective digital financial service "Nagad" is set to complete a year of its journey.

The state-run service platform brought a massive change to the country's overall financial inclusion.

Marking the last year's Independence Day, Prime Minister Sheikh Hasina had formally launched the financial service "Nagad" aiming at meeting the growing demand of mobile banking among the people.

Daily transactions of Nagad crossed Tk1.0 billion (100 crore) on January 10, just 10 months past its launch.

Posts and Telecommunications Minister Mustafa Jabbar on January 12 announced the achievement and on March 13, he disclosed that daily transaction through "Nagad" exceeded Tk 1.6 billion in continuation of the pace of growth.

Bangladesh Post Office has long been applying own method for its monetary transactions. One of the transaction methods is known as "money order", which was introduced under the jurisdiction of The Post Office Act-1898. Money order has been effective under the same law, ever since the country's independence. Nagad is the digital version of money order.

Third Wave Technologies Limited is giving technical support to help Bangladesh Post Office provide the people with the monetary service. Nagad users enjoy its services including 'cash-in', 'cash-out', 'send money (person-to-person or P2P)', 'payment' and 'mobile recharge'.

Nagad's 'cash-out' charge for Tk 1,000 is Tk 14.50. Customers receive Tk5 cash back for every Tk 1,000 'cash-in' transaction. It implies that every 'cash-out' charge for Tk 1,000 stands at Tk 9.50 after the "cash back" feature.

Nagad also facilitates bigger transactions and aims to bring small businessmen under its coverage, which is not possible for transactions of Tk 10,000 or Tk 15,000.

The service platform is also keen to send to allowances for the physically challenged, the freedom fighters and the elderly even in the remote areas. It also expects to send stipends at schools in such areas, sources said.

The prime minister has instructed the allowances worth billions of taka under the social safety net coverage to be disbursed through Nagad.

Nagad introduced the digital Know Your Customer (KYC) system as its digitised financial service. One can easily open a Nagad account using one's NID, smartphone and internet connection even from home.

In the process, the information given in any NID is automatically cross-checked with the database of the Election Commission. So, it is not possible to open more than one Nagad account using the same NID, meaning that there is no scope of fraudulence.

Before the government-run digitised financial transaction service platform, no other individual or financial institution followed this type of tight security system.

Introduced in 2010, mobile banking service played the most important role in the country's financial inclusion. According to Bangladesh Bank, around 67 million people are somehow receiving mobile financial services in the country.

Nagad is registered as a reporting organisation with the Bangladesh Financial Intelligence Unit, the anti-money laundering wing of the central bank.

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