BB allows banks to offer e-loans up to Tk50,000 with one-year tenure
Under the new policy, scheduled banks will be able to provide e-loans of up to Tk50,000 to customers through internet banking, mobile apps or e-wallets, with a maximum tenure of one year.
Bangladesh Bank has introduced a new opportunity for commercial banks to launch "e-loans" or digital loans as part of efforts to increase financial inclusion and build a cashless society.
Under the new policy, scheduled banks will be able to provide e-loans of up to Tk50,000 to customers through internet banking, mobile apps or e-wallets, with a maximum tenure of one year.
The Banking Regulation and Policy Department (BRPD) of Bangladesh Bank issued a circular in this regard today (11 May).
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Banks will be allowed to set market-based interest rates for these loans, although the rate cannot exceed 9% if the loans are disbursed under Bangladesh Bank's refinancing facility.
Bangladesh Bank has made it clear that the entire process, from customer selection to loan disbursement and recovery, must be conducted through a fully digital or "end-to-end digital" system.
Customers will not need to appear physically to sign loan applications, as identity verification must instead be completed through biometric information.
The circular made OTP and two-factor authentication (2FA) or multi-factor authentication mandatory to protect customer data and information.
It also directed banks to store all personal and loan-related customer data in data warehouses located within Bangladesh.
Before commercially launching the loans, banks must conduct at least six months of pilot operations and submit an evaluation report on the programme's success to the central bank.
The central bank said some flexibility would remain in loan approval until real-time CIB facilities become available, although banks must collect and preserve CIB reports after disbursement. Banks will not be allowed to charge customers any fee for obtaining CIB reports.
Default loan borrowers will not be eligible for the e-loan facility under any circumstances.
If any customer conceals information while taking a loan and it is later detected in the CIB report, the bank must immediately adjust the loan.
Bangladesh Bank said the spread of digital technology is increasing demand for such loans among customers and that the initiative will play an important role in bringing marginalised populations under digital financial services.
Banks will also have to submit monthly and quarterly reports on these loans to the central bank.
