Nagad, a financial services provider in Bangladesh, will have to get approval from the Postal Department and Bangladesh Bank before converting bank account name from "Third Wave Technologies Ltd" to "Nagad".
The central bank recently issued directives to banks in this regard which read that Nagad has been operating as Third Wave Technologies Limited so far. The name has been changed to Nagad Limited and from now on it will have to open a Trust cum Settlement account to keep its services running.
Sources said the central bank gave such instructions to ensure transparency in the financial dealings of Nagad. Since the renaming as Nagad, shareholders of the previous company, Third Wave Technologies, and many other new shareholders have been added. Nagad is said to be the digital financial service of the Bangladesh Postal Department, but the department still does not have any shares in Nagad.
A Trust cum Settlement Account is a custodial account where legal tender is stored against the issuance of e-money by a Payment Service Provider, or where legal tender is received from a service recipient of the payment system operator or any other authorised entity for maintaining such account, and the balance of the account may not be used for any purpose other than what is approved.
The policy has been named "Guidelines for Trust Fund Management in Payment and Settlement Services". Earlier in May, the Bangladesh Bank issued a policy titled "Trust Fund Management".
Consequently, mobile financial services providers may not use the money deposited in customer accounts. Institutions have to deposit the entire amount of a customer's deposit in the bank as a "trust fund".