Bangladesh Bank raises credit card loan limit to Tk 4mn
Bussiness Desk
Bangladesh Bank has raised the maximum loan limit against credit cards to Tk 4 million under a new policy aimed at expanding card-based financial services.
The central bank issued the directive on Sunday, saying the interest rate on such loans will be capped at 25 percent.
Currently, borrowers can take up to Tk 2.5 million in loans against a credit card with collateral, while the limit for unsecured loans stands at Tk 1 million.
Under the revised guidelines, the unsecured loan limit has been increased to Tk 2 million, while the limit for loans backed by collateral has been doubled to Tk 4 million.
Credit card holders will also be able to withdraw up to 50 percent of their total credit limit in cash.
The central bank said the use of credit cards is increasing steadily in daily transactions as an alternative to carrying cash for various payments.
With the rapid expansion of credit card usage and the introduction of new features, the regulator said it has updated the earlier policy to reduce complications and better regulate the sector.
According to the guidelines, interest may be charged only on the outstanding balance rather than the total bill amount.
While purchases made through credit cards will continue to enjoy interest-free periods, no such benefit will apply to cash withdrawals.
The policy also says banks cannot deduct any fee or service charge before activating a credit card.
