Bangladesh Bank has unveiled a groundbreaking draft regulation titled “Regulations for E-Money Issuers in Bangladesh”, paving the way for non-bank domestic and foreign entities to operate as licensed Payment Service Providers (PSPs) or Mobile Financial Service (MFS) providers. This marks a major policy shift from the existing bank-dependent model that has dominated the country's digital financial services landscape for over a decade.
The draft regulation-published on the central bank's official website for public consultation-aims to enhance financial inclusion, strengthen customer protection, and promote innovation in digital payments. If implemented, both banks and independent fintech companies will be able to issue e-money under Bangladesh Bank's supervision.
From Bank Dependence to Digital Independence: Until now, the country's digital finance ecosystem has been led by bank-affiliated MFS operators such as bKash, Rocket, and Nagad, alongside PSPs like TallyPay, PathaoPay, and ShebaPay. These entities create e-money through mobile and online transactions, but their operational scope has been largely tied to partner banks. Under the new regulation, Bangladesh Bank seeks to redefine this structure by authorizing “Dedicated E-Money Issuers (DEMIs)”-non-bank entities that will operate solely as e-money and payment service providers. According to the draft, two categories of e-money issuers will be recognized: Authorized EMIs: Entities such as banks and financial institutions already under regulatory oversight. Dedicated EMIs (DEMIs): Non-bank institutions licensed to operate exclusively in the e-money and payment domain. pplicants seeking DEMI licenses must meet stringent requirements, including a minimum paid-up capital of Tk 50 crore, submission of a three-year business and risk management plan, establishment of a Trust and Settlement Account to safeguard customer funds, and assurance of sound governance and compliance structures.
Strengthening Oversight and Consumer Protection: The draft regulation emphasizes robust risk management, cybersecurity, and transparency. All e-money issuers will be required to implement multi-factor authentication for high-value transactions, maintain tested technological infrastructures, and ensure real-time fraud detection.In addition, they must establish Board-level Audit and Risk Committees to oversee internal controls and ensure continuous compliance with central bank regulations. Violations of the rules could lead to severe penalties-including fines of at least Tk 50 lakh, license revocation, or civil and criminal proceedings.
Regulatory Transition and Public Feedback: Existing MFS and PSP operators, whether bank-linked or independent, will be required to apply for new licenses within six months of the regulation coming into effect. Bangladesh Bank has invited public comments and stakeholder feedback before the final version is enacted. “The objective is to bring all digital payment entities under a unified, transparent framework to ensure safety, stability, and innovation,” said a senior central bank official, speaking to Daily Industry. “We want to create a level playing field that welcomes non-bank innovators while maintaining financial discipline.”
Digital Finance Experts Welcome Move: Experts in the financial technology sector have welcomed the draft regulation as a progressive step toward diversifying Bangladesh's digital finance market.
Dr. Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), told Daily Industry, “This is a positive move toward greater competition and innovation in the fintech sector. Allowing non-bank companies to issue e-money will expand financial inclusion and reduce the dominance of a few players. However, strict oversight is essential to prevent misuse and protect customer funds.”
Abdul Matin, Managing Director of a leading PSP firm, said the regulation could accelerate digital payment growth if implemented carefully. “Non-bank EMIs can attract global fintech investment into Bangladesh. But compliance costs and capital requirements should be reasonable so that local startups can also participate,” he added.
Aligning with Global Practices: According to Bangladesh Bank, the draft draws inspiration from international best practices in countries such as China, India, and Malaysia, where independent e-money issuers operate under strong regulatory supervision. Financial analysts note that the proposed structure mirrors India's “Payment and Settlement Systems Act” and Malaysia's “Financial Services Act,” both of which have helped foster vibrant and secure fintech ecosystems.
“Bangladesh is finally moving toward a globally recognized model that separates payment services from traditional banking,” said Prof. Mustafizur Rahman, Distinguished Fellow at CPD. “It will improve consumer choice, enable cross-border innovation, and help the central bank better monitor digital transactions to curb money laundering risks.”
Challenges Ahead: Compliance, Security, and Trust: Despite widespread optimism, experts also warn of implementation challenges. Cybersecurity, anti-money laundering (AML) compliance, and digital literacy remain major concerns in Bangladesh's evolving digital finance space. “Allowing non-banks into the e-money ecosystem means more entities will handle sensitive financial data,” said S.M. Nurul Alam, former Director of Payment Systems at Bangladesh Bank. “This requires enhanced regulatory capacity and real-time supervision to prevent data breaches and fraud.”
Industry insiders suggest that the success of the new regulation will depend on how efficiently Bangladesh Bank enforces risk-based supervision and how swiftly financial institutions adapt their technology and governance structures.
A New Chapter for Bangladesh's Fintech Landscape: If finalized, the Regulations for E-Money Issuers in Bangladesh could revolutionize the country's digital finance sector, shifting it toward a more open, competitive, and innovation-driven model. By integrating non-bank players into the e-money ecosystem, Bangladesh Bank is signaling its intent to build a modern financial infrastructure that can support the country's ambition of becoming a “Smart Bangladesh” by 2041.
