Bangladesh Bank (BB) on Sunday issued a comprehensive policy for credit cards, doubling the loan limit to Tk 40 lakh from the previous Tk 20 lakh to encourage a cashless ecosystem.
The central bank also capped the maximum interest rate on credit card loans at 25 percent.
According to the new circular, banks can now provide up to Tk 20 lakh in unsecured loans (without collateral) and up to Tk 40 lakh against collateral. Previously, these limits were Tk 10 lakh and Tk 20 lakh, respectively.
The policy further specifies that cardholders can withdraw a maximum of 50 percent of their total credit limit in cash.
The central bank stated that the updated policy aims to reduce complexities as the use of credit cards as an alternative to cash continues to rise. The guidelines are designed to strengthen risk management, protect consumer rights, and encourage responsible lending.
The policy clarifies that the maximum 25 percent interest rate can only be applied to the outstanding balance, not the total bill amount. While interest-free periods apply to purchases, no such facility will be available for cash withdrawals.
Regarding fees, the central bank directed that no charges can be levied before a card is activated. Late payment fees can only be imposed once per billing cycle. Furthermore, banks must notify cardholders via written or electronic means at least 30 days before changing interest rates or other charges.
To prevent harassment, the guidelines strictly prohibit banks or recovery agents from physically or mentally harassing or threatening customers. The privacy of the cardholder's family, friends, or referees must be maintained.
Recovery-related communication, whether via phone or in person, must be restricted to standard office hours. Banks are also required to maintain 24-hour helplines to allow customers to block cards immediately in case of loss or theft.
To obtain a credit card, applicants must be at least 18 years old, possess an e-TIN certificate, and have a clean Credit Information Bureau (CIB) report. Students aged 16 who are dependents of a primary cardholder are eligible for supplementary cards.
This new policy replaces the previous guidelines issued in 2004.