Bangladesh Bank raises max credit card limit to Tk40 lakh

The Bangladesh Bank has raised the maximum credit card limit from Tk25 lakh to Tk40 lakh in a move aimed at strengthening the country's digital payment ecosystem and meeting the growing demand of consumers.

The central bank issued a comprehensive set of guidelines in this regard today (15 March), which will take immediate effect for all scheduled banks and authorised card issuers.

According to the directive, the decision comes amid rapid growth in credit card usage, driven by technological advancement and increasing consumer preference for convenient digital transactions.

Exercising powers under Section 45 of the Bank Company Act, 1991, the central bank introduced the updated framework to ensure a more transparent and secure cashless payment ecosystem while safeguarding consumer rights.

Under the new guidelines, banks will be required to follow stricter risk assessment protocols to encourage responsible lending and prevent potential financial instability.

The framework also introduces revised mechanisms for handling customer complaints, card-related irregularities, and transaction disputes in order to ensure a safer digital environment.

In addition, all card issuers must comply with enhanced security measures for electronic Point of Sale (POS) systems and online transactions.

The central bank said that the expansion of electronic payment infrastructure and various incentive programmes has made it necessary to establish a more robust regulatory mechanism.

"To ensure that this growth contributes positively to financial stability and consumer confidence, it is imperative to establish a comprehensive and updated regulatory framework," the central bank said in its directive.

The policy is expected to boost consumer confidence and streamline the national payment system by making credit card services more fair, compliant and customer-centric, it added.

Loan limits against cards

The central bank has also raised the limits on loans against credit cards. Unsecured loans can now reach Tk20 lakh, up from Tk10 lakh, while secured loans have been increased to Tk40 lakh from Tk25 lakh.

Loan limits are based on the bank deposit linked to the card, providing secure collateral. Cardholders can also withdraw up to 50% of their total credit limit in cash.

Interest rates and charges

The policy sets the maximum interest rate on credit card loans at 25%, applied only to the outstanding balance, not the total billed amount. While interest-free facilities are available for purchases, cash withdrawals will not benefit from such concessions.

Late payment fees can only be applied once, and any changes in interest rates or other charges must be communicated to cardholders at least 30 days in advance, either in writing or electronically.

Consumer protection

Applicants must be at least 18 years old to obtain a credit card. Students aged 16 and above who are dependent on a primary cardholder may use supplementary cards.

Applicants must also provide a valid e-TIN certificate and a clear CIB report.

To prevent harassment and protect consumers, the policy specifies that banks and recovery agents cannot subject cardholders to mental or physical intimidation. The privacy of cardholders' families, friends, or references must also be respected.

Collection calls or in-person contacts are restricted to office hours. A 24-hour helpline must be available to promptly block lost or stolen cards.