On Tuesday Bangladesh Bank issued a new regulation regarding mobile financial service (MFS) business. As of now, government entities and financial institutions will be able to get licences to provide MFS business.
According to Bangladesh Mobile Financial Services (MFS) Regulations, 2018, only scheduled banks were permitted to run MFS business. Apart from that, MFS providers could operate business with the collaboration of scheduled banks. It could also operate as a subsidiary, but MFS would need to own 51 percent of the company and have a majority on the board of directors to do so.
New rules also stated that enterprises are required to build up “capital reserve” from retained earnings at a minimum rate of 10% of yearly profits after tax, which will be equal to the amount of their paid up capital – a minimum of Tk45 crore.
Even so, Loss-making MFS providers must infuse extra capital to meet the minimum paid-up capital requirement. However, the subsidiary’s parent company must retain at least 51 percent ownership at all times.