Banks can charge up to 25% interest on credit cards from Jan
The move comes following calls from banks to increase the interest rate of credit cards
Banks can charge customers up to 25% as interest on credit cards from next year.
The Bangladesh Bank today (1 December) increased the maximum interest limit from 20% in a circular.
The new directive will come into effect from January 2025, they said.
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The move comes following calls from banks to increase the interest rate of credit cards.
According to the circular, currently, there is a directive to limit interest on credit cards to a maximum of 20% in order to protect the interests of customers and to ensure a logical interest rate on loan facilities against the credit card limit.
"However, in order to ensure fair credit risk management and to keep policy interest rates in line with the rising funding costs of banks, the maximum interest rate on credit cards has been fixed at 25%," it added.
The credit card interest rate will be determined within this limit subject to the loan demand of the banks and the supply of loanable funds, said the central bank.
The circular also stated that Islamic Shariah-based banks will take necessary measures to determine the rate of profit if they follow the mentioned guidelines in line with their investments.
According to industry insiders, the City Bank, BRAC Bank, Eastern Bank and Standard Chartered Bank are currently the top players in terms of credit card users.
