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Overview

Payment System Operators (PSOs) and Payment Service Providers (PSPs) play a central role in enabling digital payments and financial inclusion. For international firms (including those operating from England & Wales) exploring market entry into Bangladesh or supporting clients seeking licences there, the regulatory environment emphasises safety, operational resilience, anti‑money laundering and consumer protection. This note sets out practical, high‑level considerations for advising on licence applications and readiness, without substituting for local legal or regulatory advice.

Key regulatory and governance considerations

Regulators typically focus on a core set of themes. When preparing a licence application or advising a prospective applicant, consider the following areas:

• Regulatory perimeter and authorisation model — whether the activity requires a PSO/PSP licence or falls under another payment or banking licence.
• Corporate structure and local presence — requirements for local incorporation, board composition, and local senior management with clear lines of accountability.
• Risk management and governance — comprehensive governance, internal controls, incident response and business continuity arrangements (including resilience to cyber threats).
• AML/CFT and KYC — policies, transaction monitoring, sanctions screening and reporting frameworks consistent with both local law and international standards.
• Operational and outsourcing arrangements — clarity on functions retained versus outsourced, contractual protections, supervisory access and data protection considerations.
• Customer protection and dispute resolution — clear terms, safeguards for client funds, complaint handling and transparency requirements.

Typical application components and process (high level)

Application processes differ between jurisdictions and may be updated by the regulator. Generally, an application package submitted by a prospective PSO/PSP will include:

1. A detailed business plan and financial projections demonstrating viability and sustainability.
2. Corporate and organisational documents (incorporation, ownership, beneficial ownership disclosures).
3. Governance documentation — board and senior management CVs, governance frameworks, policies on risk, AML/CFT and information security.
4. Technical and operations description — system architecture, settlement arrangements, contingency arrangements and third‑party contracts.
5. Consumer protection measures and any proposed fees/charges disclosure.

Regulatory engagement is key: early meetings with the regulator, submission of draft documentation and readiness assessments reduce time to decision. Timelines and precise documentary requirements are set by the relevant regulator and can change.

Practical pre‑application checklist

• Confirm the correct regulatory licence and supervisory authority for the intended services.
• Decide on local entity versus branch structure; confirm statutory requirements for local operations.
• Prepare a robust business plan with realistic projections and capital plan.
• Assemble governance documents, risk frameworks, AML/CFT policies and incident response plans.
• Map technology, settlement flows and third‑party relationships; prepare outsourcing agreements and evidence of due diligence.
• Plan for consumer protection, complaints handling and data localisation or cross‑border data transfer constraints.
• Engage local counsel and a regulatory consultant with experience in payments in the target jurisdiction.

Early regulatory engagement and local compliance expertise materially improve the prospects of a smooth application process.

Jurisdiction and sources

Regulatory requirements are set by the central bank and related authorities in Bangladesh; official sources and the regulator’s website should be consulted for current rules and circulars. Official sources include:

• Bangladesh Bank (official website)
• Published payment and settlement regulations and circulars available from the central bank

For firms based in England & Wales, consider also relevant UK regulatory guidance on cross‑border payments and sanctions screening as part of global compliance planning.

General information only; not legal advice and not a substitute for advice on a particular matter.