What are the exact regulatory steps and timelines to obtain a license for a mobile financial service in Bangladesh?

Hello and Respect,

I have reviewed your query regarding the launch of a mobile wallet and payment application in Bangladesh. Given the strict oversight by Bangladesh Bank (BB), choosing the correct license category is critical before you proceed, as the regulatory pathways for a \"Mobile Financial Service\" (MFS) and a \"Payment Service Provider\" (PSP) are distinct.

Based on the Bangladesh Mobile Financial Services (MFS) Regulations, 2022 and the Payment and Settlement Systems Act, 2024, here is the regulatory framework you must navigate:

1. License Category Selection
You must determine if you qualify for an MFS or a PSP license, as they have different ownership structures:

MFS License (Bank-Led Model): If you intend to offer \"Cash-in/Cash-out\" services via an agent network (like bKash or Rocket), you must form a subsidiary where a scheduled commercial bank holds at least 51% of the equity. The minimum paid-up capital required is BDT 450 million (45 Crore).​

PSP License (E-Wallet Model): If you are an independent fintech launching a digital wallet (e-money) without a bank parent, you should apply for a Payment Service Provider (PSP) license. This allows you to issue e-wallets and process payments. The minimum paid-up capital is BDT 200 million (20 Crore).​

2. The Two-Phase Application Process
Regardless of the category, the licensing process with the Payment Systems Department (PSD) of Bangladesh Bank typically follows two phases:​

Phase 1 (NOC): You submit your business plan, feasibility study, and IT architecture. If approved, you receive a No Objection Certificate (NOC) to set up your infrastructure. This NOC is valid for one year.

Phase 2 (Final License): After establishing your IT infrastructure and local data centers (Data Localization is mandatory), BB will conduct an on-site inspection. If compliant, the final license to commence business is issued.

3. Critical Compliance Obligations
AML/KYC: You must comply with the Bangladesh Financial Intelligence Unit (BFIU) guidelines. This includes implementing Electronic KYC (e-KYC) with biometric verification against the National Election Commission database and filing Suspicious Transaction Reports (STR).​

Settlement & Trust Fund: For PSPs, you are required to maintain client funds in a dedicated Trust Fund account with a scheduled bank, ensuring customer balances are never used for company operational expenses.​

Consultation Offer:
Navigating the \"Fit and Proper\" test for directors and drafting the compliant Business Plan (including the 3-year financial projection) requires precision.

Although I am currently based abroad, I specialize in providing detailed, text-based regulatory consultancy for fintech startups. I can guide you through the documentation, capital structuring, and application drafting remotely.

Licensing Categories:
To launch a mobile wallet and payment app under Bangladesh Bank oversight, you will typically require approval as a Payment Service Provider (PSP) for customer-facing services such as mobile wallets, merchant payments, QR transactions, and digital onboarding, or as a Payment System Operator (PSO) if you intend to run switching, routing, clearing, settlement, or shared payment infrastructure. Certain business models may require both licences.

Processing Time:
The approval timeline generally ranges from 3 to 6 months or more, depending on how complete your technical, financial, and compliance documentation is, the complexity of your proposed model, and Bangladesh Bank’s due-diligence and inspection process.

AML/KYC, Capital & Reporting Obligations:
You must comply with stringent AML/KYC requirements under the Money Laundering Prevention Act and BFIU guidelines, including customer due diligence, e-KYC integration, continuous transaction monitoring, STR/CTR reporting, sanctions screening, data retention standards, and appointment of a dedicated compliance officer. Bangladesh Bank also requires sufficient capital adequacy, minimum paid-up capital appropriate to the licence category, strong governance, audited accounts, and maintenance of a secure escrow/settlement account for customer funds. Ongoing reporting duties include periodic regulatory returns, transaction-level reporting, cybersecurity compliance confirmations, IT and penetration-testing audits, and mandatory incident notifications under the ICT Security Guidelines.

If you wish, our chamber can prepare a tailored licensing roadmap, documentation checklist, and full regulatory support—please feel free to contact us with your intended business model.