Binimoy: How a state-funded digital platform was turned into a private profit machine

Infographic: TBS

Invest your money, build a business, and then hand it over for free on a 50-50 revenue-sharing model. Such deals are often justified when the cost of operating and maintaining the business is too high.

But that was never the case for Binimoy, the interoperable digital transaction platform envisioned to foster a cost-effective cashless Bangladesh.

Instead, the Tk65 crore state-funded platform, inaugurated in November 2022, became a glaring example of how the Bangladesh Bank compromised national interests in favour of private entities.

On 28 January 2024, the central bank signed a one-sided contract with private firm Velwire Limited, owned by Zareef Hamid and a US-based firm named Prime Holdings LLC, for Binimoy's operations. Zareef is the son of former state minister for power Nasrul Hamid.

According to the contract, seen by TBS, the central bank would bear all costs of maintenance, upgrades, and platform management – while Velwire would receive 50% of the revenue from each transaction. In return, Velwire was only required to deploy three employees on a 24/7 roster at the Binimoy maintenance room within a BB annex building.

The contract lacked a termination clause, effectively trapping the central bank in a one-sided agreement. Worse still, Velwire bore no liability for glitches, security breaches, or system failures.

Now, the central bank, ICT Division, and FinTech experts are alleging that the former prime minister's son and her ICT adviser, Sajeeb Wazed Joy, and his associates pressured BB into discarding its own interoperability model in favour of the costlier one backed by the ICT Division. Former state minister for ICT Zunaid Ahmed Palak was instrumental in executing Joy's agenda.

They allege that the group imposed the highly skewed contract on the central bank to syphon off half of Binimoy's operating revenue without any justifiable contribution.

According to estimates, if just 20% of the country's daily Tk5,000 crore MFS turnover passes through Binimoy, the company could earn several hundred crores in annual profit.

To ensure a steady income for Velwire, the BB, under then-governor Abdur Rouf Talukder, set a higher-than-expected tariff for each interoperable transaction – directly contradicting global practices, where governments lower such costs to fuel FinTech growth.

Other countries have sacrificed revenue in favour of making digital transactions affordable, triggering a financial technology boom. But in Bangladesh, the opposite was done – an artificial cost burden was created to enrich a select few.

Furthermore, Velwire was given the authority to "advise" BB on maintenance and development – at the central bank's expense.

"This was an unfair contract. The signatory officials of BB's Payment Systems Department had little say in the matter as everything was dictated from the highest levels of the government at the time," BB Executive Director and Spokesperson Arief Hossain Khan told TBS.

According to Arief, the central bank neither required the ICT Division's involvement in building Binimoy nor needed Velwire Limited to operate it. The entire process was a manufactured necessity, engineered to divert public funds into private pockets.

The platform, designed to be the national interoperability umbrella – allowing seamless, low-cost transactions across banking, mobile financial services (MFS), and digital payment processors – charges Tk5 for every Tk1,000 transferred between MFS platforms. For transfers from an MFS account to a bank account, the charge is Tk10.

'Shell company of Joy?'

According to the Registrar of Joint Stock Companies (RJSC) documents, Velwire is owned by former state minister Nasrul Hamid's son Zareef Hamid and Prime Holdings LLC, a firm registered at Virginia, USA, represented by Summit Group's Muhammad Farid Khan.

Zareef Hamid and his mother Seema Hamid together formed a company namely Fintech Solutions Limited with Tk10 lakh paid up capital in October 2017 as the ICT Division started planning for interoperability investments.

Fintech Solutions entered the joint venture led by local software company Orion Informatics and Hong Kong-based Sain Ventures, in collaboration with Microsoft Bangladesh, to become the lowest bidder for building the IDTP platform, funded by the Innovation and Entrepreneurship Development Academy (IDEA) project of the Bangladesh Computer Council, ICT Division.

Iqbal Habib, managing director of Orion Informatics told TBS, they only built the platform as required by the ICT Division and the central bank. The platform along with the copyright was handed over to the BB.

"We are not aware of any contract later," he said.

Meanwhile, Seema Hamid left Fintech Solutions by transferring her shares to Zareef Hamid and the Virginia-based firm entered with 3,000 newly issued shares along with a board seat in July 2020.

In 2022, Fintech Solutions changed its name to Velwire Limited before eying the lucrative revenue sharing model.

BB Governor Dr Ahsan H Mansur in a recent speech said Binimoy platform was linked to "a shell company of Joy."

The Bangladesh Bank, however, is yet to get any service from the operating partner and it now eyes contact termination, according to Spokesperson Arief Hossain Khan.

Both Nasrul Hamid and Zareef Hamid could not be reached for comment by phone.

'Malafide profiteering intention' behind venture

According to policymakers and experts, the Binimoy fiasco stands as a cautionary tale of how state resources can be manipulated under the guise of public service – leaving citizens to pay the price for political patronage.

ICT Division's ICT Policy Adviser Faiz Ahmad Taiyeb told TBS that interoperability among all the electronic transaction and payment systems has been a crying need for Bangladesh as it could trigger a real cashless revolution as observed in many peer countries.

"But, the concept failed in Bangladesh only because of the malafide profiteering intention of the Joy-Palak-Hamid gang," he said.

Lacking enough reasons for using it, Binimoy could onboard only a dozen out of the 62 scheduled banks, three out of 13 MFS, and one digital payment processor out of 18, according to the BB's Payment Systems Department.

On 5 February this year, some 4.3 lakh customers had a Binimoy account, while Bkash got around 8 crore MFS customers to register around 1.5 crore daily transactions on average.

According to the BB, not even Tk40 lakh flowed through 1,409 Binimoy transactions on the day, while the daily MFS turnover in the country crossed Tk5,000 crore.

"It is high time to come out of such multiple silo based faulty ways. Faiz Ahmad Taiyeb said. "Two MFS companies connected to the same payment switch, National Payment Switch Bangladesh (NPSB), yet not interoperable, is something  unacceptable," Taiyeb said. 

"Better, let the central bank extend and strengthen its successful NPSB platform for fully-fledged  interoperability. NPSB should be evolved as an universal payment gateway aggregator where market, merchant, banks, financial systems, fintech, MFS, Payment Service Operators etc all connect to each other as an end to end payment ecosystem which can be further integrated into the revenue collection systems of NBR," he added.

Otherwise, somebody else might muscle their way to profit from projects like Binimoy ignoring national interest, he warned.

Former ICT State Minister Zunaid Ahmed Palak prepared another project plan to spend Tk278 crore for scaling up Binimoy and help Velwire bag half of the revenue, according to a halted development project proposal seen by TBS.

"The ousted regime's political patronage of the Binimoy platform held back the wider rollout of the technologically superior NPSB," said Pathao CEO Fahim Ahmed.

"Not only was Binimoy designed with a rent-seeking intention by the former regime, it was also not user-friendly, and the interoperability pricing was poorly structured. This resulted in neither consumers nor financial service providers adopting the platform," he added.

"An interoperable financial system is a key prerequisite in digital payment adoption and expansion of digital services for the wider population," the Tech CEO said, adding, "The central bank must move fast towards a wider rollout of NPSB, and an implementation of a logical interoperability pricing that can encourage all financial services providers to rapidly adopt the system."

Technology entrepreneur Fahim Mashroor, former president of the Bangladesh Association of Software and Information Services, said the Bangladesh Bank without any support of the ICT Division or any revenue sharing operating partner like Velwire, successfully implemented and popularised several automated transaction platforms, including those for automated cheque clearing, real time gross settlement and the NPSB.

Echoing others, he said, Binimoy was only for benefitting the crony company.

Insights from global digital payment trends

Fahim Mashroor said Indian central bank and the banks' association had a 100 crore rupee venture for real time online payment processing. Prioritising FinTech growth they built it not for profit.

Their interoperable instant online payment platform Unified Payments Interface (UPI) kept small transactions free for years. In India, one can instantly pay even 20 rupee to a street vendor by a QR code scanning.

Now 40% of Indian consumers use UPI for online payments and the cashless economy emerged to be a boon for the nation in every term – from state revenue to harnessing technology for development.

India's UPI registered 131 billion transactions worth nearly 200 trillion rupee turnover in the 2023-24 FY.

Pakistani central bank's instant online payment platform Raast, adding a person to person module in 2022, reported a trillion Rupee turnover in just 16 days last year.

Fahim Mashroor said Binimoy eyed income for the private sector player from day one without contribution.

FinTech expert Dr Shahadat Khan, founder of Sure Cash, said the biggest damage done by Binimoy is it wasted half a decade of a potential digital transaction boom in the country.

NPSB could easily be extended for interoperability from the present banks-only platform to MFS, e-wallets and digital payment processors, he said.

Dr Khan said Bangladesh missed the latest wave of the cashless economy boom. Small and medium merchants fear the transaction cost for online payments and prefer cash.

According to him, MFS users still cash out from their accounts paying Tk14-Tk18 per thousand taka, they don't even think of trying Binimoy to take mobile money to a bank account by paying Tk10 against per thousand taka. Because, it is inconvenient, cumbersome and lacks incentives.

A market of 17 crore people remained ignored by the world's tech investors and the country needs a breakthrough by correcting the course, he added.