bKash, a subsidiary of BRAC Bank, has sent a rejoinder to a news item published in New Age headlined ‘bKash holds 4 lakh accounts in violation of BB rules’ on June 18.
The rejoinder claimed that bKash was operating as per the licence and guidelines of Bangladesh Bank.
It said BRAC Bank had sought approval and no-objection from BB on December 6, 2009 to form a joint venture subsidiary company to operate as a PSO (Payment Service Operator) and subsequently BB permitted BRAC Bank to form the subsidiary company and granted it a PSO licence.
The statement conceded that New Age had reproduced the definition of a ‘Payment System Operator’ accurately.
It claimed that BRAC Bank was duly performing the role of the principal participant in bKash in accordance with the regulation, guidelines and applicable laws.
Regarding holding of customer accounts, the company, quoting clause 6 of the granted licence, said, ‘At any point of time, the physical cash balance of bKash account held by BRAC Bank Limited must be equal to the balance shown in the system of bKash digital wallet platform. This account shall remain under surveillance of Bangladesh Bank.’
Furthermore, since the customers’ deposits were held with BRAC Bank as per requirement of the PSO license, it was covered by the bank’s deposit insurance scheme, contrary to what the New Age report mentioned, it said,
The company said as per Section 4 of the MFS Guidelines, it was clearly defined that ‘The guidelines shall apply to the scheduled commercial banks and their subsidiaries [in this case bKash] operating in Bangladesh.’
The company claimed that it had not indulged in any illegal activities and had not violated any BB rules and the report was extremely detrimental to the corporate image and business of bKash.
The rejoinder further said that the report presented erroneous information, misrepresenting the facts and was liable to be termed as defamatory.
It said the news report had created confusion among readers and created a negative impression among valued consumers, stakeholders and patrons of bKash.
New Age reply
The New Age report was carried out after discussing with several officials of Bangladesh Bank and examining all relevant documents for over a month.
Besides, the comments of BB executive director and BRAC Bank managing director were also incorporated in the report.
New Age again checked the company’s claim with the BB officials on Wednesday.
bKash is performing an entity like a bank by holding customer accounts and their deposit although it has no banking licence.
 The Section 6 of the BB’s MFS guidelines clearly said that the customer accounts should be with the bank and in this case BRAC Bank should hold the accounts.
Bangladesh bank officials on Wednesday said that the company’s claim that Section 4 of the guidelines allowed it to hold customer accounts was not right.
An official who deals with mobile banking said that the company should transfer the customer accounts to BRAC Bank.
‘Any organisation without banking licence from BB, should not hold customer accounts. bKash’s activities in regards to holding customer accounts is not right,’ he said.
Regarding bKash’s claim about insurance coverage of bKash customers by BRAC Bank’s deposit scheme, he said bKash was a separate legal entity and the company should not be mixed with BRAC Bank.
He said that the central bank was scrutinising bKash’s activities and would take action against the company if any anomalies were found.