Nagad digital bank set to launch image credit: shutterstock.com

Nagad is ramping up plans to launch a digital bank and aims to secure a licence from the Bangladesh Bank in the fourth quarter.

Sadaf Roksana, a co-founder and executive director of Nagad will lead the banking unit. The aim is to offer a service that will bring greater convenience to the lives of millions of Bangladeshis, reducing their reliance on traditional brick-and-mortar banks.

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The MFS provider earlier applied to secure a digital bank licence following the central bank’s call for applications. The Bangladesh Bank also formulated necessary guidelines to widen and accelerate financial inclusion. This will also create jobs for young IT workers.

Nagad describes itself as the world’s fastest mobile money carrier. According to Sadaf, Nagad will provide its consumers with innovative and convenient banking solutions once it secures a licence.

“We are very excited that we are going to introduce digital banking services to the people of Bangladesh within a couple of months. This endeavour aligns perfectly with our vision of enhancing financial inclusion and ensuring easy access to all financial services also at affordable prices.”

Nagad is already well-equipped to launch a digital bank. It will start serving customers soon after getting the licence, Sadaf assured.

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Under its digital banking platform, Nagad will introduce many services such as single-digit and collateral-free loans for small informal businesses and farmers. Currently, such consumers are charged exorbitant interest rates from moneylenders.

“We will encourage them to come under financial inclusion, thus putting their money into the formal channel,” she added.

To assess customer creditworthiness, Nagad has created an AI-based credit rating system. This will analyse all transactions-related data available on public domains using one’s NID and mobile number.