Visa restrictions push India to third in credit card spending by Bangladeshis
The United States continues to hold the top position for overseas credit card usage
India has slipped from the top to the third position in dollar spending through credit cards by Bangladeshis abroad within four months, following New Delhi's visa restrictions after the fall of the Sheikh Hasina government.
According to a Bangladesh Bank report, Bangladeshis spent Tk499 crore abroad through credit cards in October, up from Tk420 crore in September, marking an 18.80% or Tk79 crore increase.
However, spending in India saw a significant decline. In October, Bangladeshis spent Tk53 crore in India, accounting for 10.78% of total transactions, placing India in third position.
In contrast, spending in India was Tk92 crore, or 17.56% of total transactions in June, which had then put the country at the top.
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As of October, the USA ranked first in credit card spending by Bangladeshis, followed by Thailand. Spending in Thailand rose from Tk42 crore in September to Tk57 crore in October, elevating the country to second place.
Bankers say following the ouster of the Awami League government in early August, India imposed restrictions on issuing visas, including travel visas, to Bangladeshis. This has led Thailand and Singapore to emerge as the primary destinations for Bangladeshis seeking travel, medical treatment, and other needs, significantly increasing credit card usage in these countries.
While India's visas were completely suspended for a few months after the interim government took office in August, a limited number are now being issued under certain conditions.
According to the Tour Operators Association of Bangladesh, India has traditionally been the most popular outbound destination for Bangladeshis, accounting for 40%-45% of total travellers due to cultural ties, proximity, and easy visa access. However, the situation changed after 5 August, when India suspended visa issuance following the political shift.
Although India has resumed issuing visas on a small scale, the numbers remain insufficient, causing a sharp drop in passengers on Indian routes. Airlines have responded by reducing or temporarily suspending flights to India.
The suspension of Indian visas has significantly impacted the travel and airline industries in both Bangladesh and India. However, it has unexpectedly boosted outbound tourism to other South Asian and Southeast Asian destinations such as the Maldives, Sri Lanka, Nepal, Thailand, and Vietnam.
According to the Bangladesh Outbound Tour Operators Forum, as the peak season begins amid the ongoing visa restrictions, leisure tourism to these alternative destinations has increased by 10% to 15%.
Drops in demand and rate of Indian rupee
Money exchange houses in Dhaka are struggling to find buyers for Indian rupees, with the currency's value dropping by 4-5 paisa against the taka within a week.
This decline has been reported from exchange hubs in the Motijheel, Paltan, and Baitul Mukarram areas.
On Tuesday (17 December), exchange houses were selling the Indian rupee at Tk1.40 to Tk1.44, compared to Tk1.48 to Tk1.50 a month ago.
Nadir, a currency trader in the kerb market, said there is virtually no demand for the Indian rupee, attributing the drop in sales to political tensions between the two countries. "Previously, we sold Tk50,000 to Tk80,000 worth of Indian rupees daily, but now there are no buyers, and prices are falling."
Another trader, Ripon, noted that sales have sharply declined since India restricted visas for Bangladeshis. "Earlier, we sold around six lakh rupees weekly, but in the past week, sales have fallen to less than 50,000 rupees."
Credit card use by foreigners in Bangladesh also rising
Credit card usage by foreigners in Bangladesh has also increased alongside the rising use of credit cards by Bangladeshis at home and abroad.
In October, foreigners spent Tk129 crore on credit cards, up from Tk111 crore in September, marking an increase of Tk18 crore, or 16.5%, in a month.
A significant portion of this spending was for cash withdrawals, with Tk47 crore withdrawn in October alone.
