Credit Card interest rate fixed to 20% by Bangladesh Bank

Credit interest rate fixed:

Banks will no longer be able to charge more than 20% from credit card customers. Bangladesh Bank has fixed the Credit Card interest rate fixed to 20% . The circular has been sent to the chief executives of all the banks. This instruction will be effective from October 1.

 

Bangladesh Bank Circular:

According to the circular, on August 3, 2016, Bangladesh Bank issued a policy on credit cards. It said that the interest rate on credit cards will not be more than 5 per cent of the maximum interest rate on other loans of the concerned bank and this interest rate will be applicable only on unpaid arrears.

According to the guidelines of the policy, cash withdrawals can be made up to 50 per cent of the credit card limit in advance and no unsolicited loan or any other loan can be given to the customer against the credit card. But recently it has been noticed that some banks are violating the guidelines by offering different types of cash withdrawals in different names as opposed to credit cards; Which is increasing the loan risk of the bank and imposing unreasonably high interest on flat rate on such loans; Which is harming the interest of the customer.

The central bank also said that some banks have been charging interest on unpaid credit card bills from the date of transaction and charging delay fees at ‘progressive rate’ against unpaid bills.

 

Central Bank Taken Decisions  :

 

• No more than 20% can be fixed on credit card interest / profit.
• Interest / profit can be levied on the bill from the day after the last date fixed for payment. In this case no interest can be charged from the date of transaction in any way.
• According to the existing policy, maximum 50 per cent cash withdrawal loan facility cannot be given on credit card in any other name.
• Against any late paid bill, only one late delay fee (whatever the other name may be called) can be collected.
• Besides, other conditions of the previous policy will remain unchanged, Bangladesh Bank said.

 

 

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