Bangladesh’s interim government to restructure Nagad under an independent board amid fraud allegations, governance concerns, and a High Court ruling.
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| Nagad faces restructuring as Bangladesh's interim government announces an independent board to address fraud, court battles, and regulatory conflicts. Image: CH |
Dhaka, Bangladesh — May 19, 2025:
Bangladesh’s interim government has announced the formation of an independent board to oversee the operations of mobile financial service provider Nagad, following serious allegations of fraud and a contentious High Court ruling that limited regulatory control by the central bank.
The decision was reached during a high-level meeting held at the Secretariat, attended by Finance Adviser Salehuddin Ahmed, Bangladesh Bank Governor Ahsan H Mansur, Special Assistant to the Chief Adviser Faiz Ahmad Taiyeb, and Attorney General Md Asaduzzaman, among others.
Finance Adviser Salehuddin stated that Nagad would be restructured and separated from oversight by both the Bangladesh Bank and the Postal Department. He also confirmed that Md Shafayet Alam—who controversially assumed the role of CEO—must resign, as his appointment violated legal and procedural norms.
Governor Mansur further alleged that Alam had committed fraud and was unfit to hold the position.
In a separate development, Bangladesh Bank revealed that so-called “miscreants” have regained control of Nagad following a High Court order that stayed the appointment of an administrator previously installed after the fall of the Awami League-led government in August 2024. The court’s decision allowed the Bangladesh Postal Department to resume control of Nagad’s operations.
This shift has raised red flags over renewed financial irregularities. A forensic audit conducted by the Bangladesh Bank revealed large-scale misconduct at Nagad, including the unauthorized creation of Tk2,356 crore in electronic money and the falsification of records using fictitious agents and distributors.
Arief Hossain Khan, executive director and spokesperson of the Bangladesh Bank, said during a Saturday press conference that 23 central bank officials were dismissed for their role in the audit and that sweeping changes within Nagad’s leadership have followed the court’s decision.
The High Court’s stay order will be challenged in a full bench hearing at the Appellate Division on May 19. Bangladesh Bank plans to appeal the suspension of the interim government-appointed administrator.
Since regaining control, newly appointed CEO Shafayet Alam—previously a director of Nagad and an accused in a central bank case—has reportedly made major leadership changes. These include appointing a new head of HR and removing 23 senior staff members. Two other individuals named in the same fraud case have also been given key roles.
These developments have caused concern over the company’s governance and operational integrity. Allegations suggest that during the previous government’s tenure, Nagad received special treatment in customer onboarding and the disbursement of government allowances, bypassing standard regulatory checks.
The Bangladesh Bank has since filed cases against 24 individuals, including eight current and former director generals of the Postal Department, Nagad’s former chairman, and its former CEO.
“Nagad was operating without proper oversight, which is why we intervened,” said Arief Hossain. “Due to the court’s decision, we’ve had to withdraw. We hope the judiciary reconsiders so we can resume protecting public funds.”