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A forensic audit conducted by Bangladesh Bank has revealed staggering financial misconduct by Nagad, a mobile financial service (MFS) provider, involving the embezzlement of over BDT 2,500 crore. The funds, primarily intended for the poor through social safety net programs, were allegedly siphoned off through various illicit means.
According to the audit, Nagad misappropriated BDT 1,711.49 crore from government funds meant for social welfare allowances. These funds, intended to support the country's impoverished population, were channeled through 41 unauthorized distributors. Additionally, Nagad is accused of causing a loss of BDT 144 crore by illegally transferring money from the accounts of 18,233 e-commerce customers. The audit points to Nagad’s former Managing Director, Tanvir A Mishuk, and his syndicate as the primary beneficiaries of these misappropriated funds.
The report also highlights Nagad’s role in creating BDT 645 crore in unauthorized e-money without Bangladesh Bank’s approval, violating the agreement with the Postal Department and contributing to inflation. This act is seen as a direct challenge to the central bank’s authority to issue currency. Furthermore, Bangladesh Bank has identified potential money laundering activities, with suspicions surrounding the transfer of BDT 500 crore in shares to entities like Candlestone Investments Partners Limited and Sigma Engineers Limited, raising concerns of illicit financial flows.
In 2021, Nagad closed the accounts of numerous e-commerce customers linked to platforms like Evaly, E-orange, and Aladdin’s Lamp, allegedly looting thousands of crores under the pretext of suspicious transactions. This led to protests by affected customers, who claimed Nagad offered deceptive discounts to lure them into transactions before abruptly freezing their accounts.
Bangladesh Bank’s investigation also uncovered that Nagad provided manipulated reports to the central bank and the Postal Department through a fraudulent portal, disconnected from its actual database. Nagad’s operations, initially launched without proper authorization in 2019, have been under scrutiny, with the central bank granting interim approval in 2020, extended until December 31, 2025. However, no valid contract exists between the Postal Department and Nagad Limited, raising questions about the legality of its operations.
Commenting on the issue, Arif Hossain Khan, Executive Director and spokesperson for Bangladesh Bank, stated that a court stay order currently prevents intervention, but the central bank will act once the court issues further directives. Nagad accounts for 18.64% of the MFS market, with over 9 crore customers and daily transactions exceeding BDT 1,000 crore, making it the second-largest MFS provider in Bangladesh.
The ongoing investigation by Bangladesh Bank and the Anti-Corruption Commission underscores the severity of the allegations, with a case filed against Nagad on February 3, 2025, at Motijheel Police Station for unauthorized e-money issuance.
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