Bangladesh Bank raises credit card interest rate
Staff Correspondent
Bangladesh Bank has turned up the dial on consumer credit costs, hiking the ceiling on credit card interest rates by a significant 5 percentage points.
Previously maxed out at 20 percent, the new cap soars to a lofty 25 percent, nudging borrowers to tread cautiously in their spending sprees.
The change will take effect in the new year.
A notification issued by the central bank on Sunday said the banks will be allowed to implement the updated rate from 2025.
It was sent to managing directors and chief executives of all scheduled banks.
The central bank justified the decision, saying the hike was made to "ensure proper loan risk management and to align with the increasing costs banks face in their funding operations”.
Islami Shariah-based banks would set their profit rates in accordance with their investment guidelines. Other regulations will remain unchanged.
The maximum interest rate for credit card loans was set at 20 percent in September 2020, and the new hike comes after nearly four years, amid rising inflation concerns.
Governor Ahsan H Mansur had hinted at this adjustment during a meeting with commercial bank executives on Sept 4.
