Bangladesh Bank Unveils Draft Rules to Open Mobile Money to Non-Bank Players
The Bangladesh Bank has unveiled draft rules that will open up the mobile money sector to non-bank players, marking a significant shift in the country's financial landscape. The new regulations aim to foster innovation, competition, and financial inclusion by allowing both local and foreign non-bank companies to obtain licenses as Payment Service Providers (PSPs) or Mobile Financial Service (MFS) providers.
Under the proposed framework, e-money issuers will be categorized into two groups: authorized EMIs, which include regulated institutions like banks and finance companies, and dedicated EMIs (DEMIs), which are non-bank entities focused solely on e-money and related payment activities. These new entrants will be required to meet stringent criteria, including a minimum paid-up capital of Tk50 crore, a three-year business and risk plan, and the establishment of Trust and Settlement Accounts to safeguard customer funds.
The regulations also emphasize the importance of robust risk management, technology systems with sound internal controls, multi-factor authentication for high-value transactions, and continuous fraud detection. Governance is a key focus, with a requirement for high-integrity directors, strict segregation of duties, and mandatory board audit and risk committees to ensure compliance and regulatory oversight.
Violations of these rules could result in severe consequences, including fines of Tk50 lakh, license revocation, and legal action. The Bangladesh Bank has invited stakeholders to provide feedback on the draft rules before the final regulations are issued.
Once implemented, the new framework is expected to revolutionize Bangladesh's digital finance industry, aligning it with international standards seen in countries like China, India, and Malaysia. This move is seen as a milestone reform, opening up the digital finance space beyond traditional banks and encouraging a more competitive and innovative environment.
