Cenbank introduces interest-free e-payment credit facility of up to Tk10,000

Bangladesh Bank has directed scheduled banks to introduce an ‘e-payment credit’ facility of up to Tk10,000 to encourage digital transactions.

Under the facility, customers will be able to make payments for bills and service charges through a fully digital process by paying a prescribed fee instead of taking interest-based loans.

The Banking Regulation and Policy Department-1 of the central bank issued the directive in a circular today (6 September).

Customers can use the credit to pay utility bills, mobile recharge costs, education and healthcare fees, tolls and tickets, taxes and other government fees, deposit instalments, insurance premiums and other expenses approved by Bangladesh Bank.

The maximum fee will depend on the amount of credit and the repayment tenure.

For credit of Tk50 to Tk250, the maximum fee will be Tk3 for seven days, Tk4 for 15 days and Tk6 for 30 days.

For credit of Tk7,001 to Tk10,000, the maximum fee will be Tk35 for seven days, Tk70 for 15 days and Tk130 for 30 days.

According to the circular, customers must repay the principal and applicable fee in full by the eighth, 16th or 31st day, depending on the selected tenure.

The credit amount must be paid directly to the designated service provider through an approved digital channel. It cannot be converted into cash, added to a customer’s wallet or transferred to another account.

Customers may repay the credit before the due date without incurring any additional fee, interest, pre-payment, early settlement or foreclosure charge beyond the prescribed fee.

However, a customer who fails to repay the credit within the stipulated period may face an additional daily penalty or fee for the extended period, subject to the prescribed limit.

The central bank also instructed the scheduled banks to disclose all key terms to customers before approving the credit, including the type and amount of credit, applicable fee, tenure and repayment method.

Banks must also take necessary measures to improve customers’ financial awareness.

For approving the credit, banks have been instructed to use alternative digital credit-scoring models and set risk-based credit limits.

Digital onboarding must be completed using the customer’s registered mobile number. The customer’s identity must be verified through one-time password (OTP), two-factor authentication (2FA), multi-factor authentication (MFA) or another secure method.

Banks may use service channels operated by mobile financial service (MFS) providers, payment service providers (PSPs), payment system operators (PSOs) and other fintech firms to implement the facility.

Banks must store customer and credit-related data in data warehouses located within Bangladesh and ensure the confidentiality and security of the information.

The facility must first be operated on a pilot basis for at least six months before commercial launch.

Following an evaluation of the pilot and a positive report, banks may launch the e-payment credit facility commercially with approval from their respective boards.

Within 15 working days of the commercial launch, banks must inform Bangladesh Bank’s Banking Regulation and Policy Department-1 about the pilot evaluation and the approved Product Programme Guideline (PPG).