Telecom Operators Face Bank Led Model in Draft MFS Regulations in Indonesia

In the latest iteration of mobile financial services (MFS) regulation, The Daily Star reported that the Bangladesh Bank has frozen out telecom operators from operating as or having an ownership in an MFS provider. While prior drafts permitted mobile network operators (MNOs) to hold as much as a 49% ownership, a board member of the country's central bank was cited as having expressed concerns about the potential for conflict of interest with the Bangladesh Telecommunication Regulatory Commission if MNOs could be included as shareholders.

MFS providers are expected to follow a bank-led model. Applications by banks which have not yet been licensed for MFS operation will need to form a subsidiary with a parent bank holding no less than a 51% equity interest. Other investors may include non-governmental organizations, non-bank financial institutions and certain authorized entities.

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