BB to launch interest-free digital credit

Bangladesh Bank (BB) is set to introduce an “e-Payment Credit” facility, likely today, to promote cashless payments and help customers manage temporary cash shortages.

Under the facility, eligible customers will be able to borrow between Tk 50 and Tk 10,000 to meet essential expenses through digital payments, according to BB officials.

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The credit can be used to pay utility bills, mobile recharges, education and healthcare expenses, travel costs, taxes and government service fees, deposit instalments and insurance premiums.

Banks will initially pilot the facility for at least six months before launching it commercially. A commercial rollout will require an assessment of the pilot and approval from the respective bank’s board.

The facility is strictly for digital payments. Customers cannot withdraw the credit as cash, transfer it to a bank account or add it to a mobile wallet. The approved amount must be paid directly to the designated biller through an authorised digital payment channel.

Repayment periods will be seven, 15 or 30 days, with banks charging a prescribed service fee instead of interest.

For credit of Tk 50-Tk 250, the maximum service fee will be Tk 3 for seven days, Tk 4 for 15 days and Tk 6 for 30 days. For credit of Tk 7,001-Tk 10,000, the maximum fees will be Tk 35, Tk 70 and Tk 130, respectively.

Customers who repay on time will not face any additional interest or early-settlement charges. Penalties may apply to overdue payments but cannot exceed the applicable daily service fee.

Banks must complete the entire process -- including onboarding, credit approval, payment and repayment -- digitally, using secure authentication methods such as one-time passwords and two-factor or multi-factor authentication.

Banks may partner with mobile financial service providers, payment service providers and fintech firms to operate the facility.

The scheme will remain subject to BB’s rules on loan classification, risk management, customer protection, anti-money laundering and data security.