BB raises credit card loan limit to Tk 40 lakh

Bangladesh Bank (BB) has raised the maximum credit card loan limit for individuals to Tk 40 lakh from Tk 25 lakh for local use and has also doubled the unsecured credit card loan ceiling.

A directive in this regard was issued yesterday, including a comprehensive new guideline for banks aiming to promote a cashless economy and strengthen credit card governance.

Under the revised framework, the unsecured credit card loan ceiling was set at Tk 20 lakh, up from the previous Tk 10 lakh, allowing banks to extend higher credit without collateral.

The new directive from the central bank comes as credit card usage continues to expand rapidly for everyday transactions, online purchases, and bill payments across the country.

BB said the updated framework consolidates previous circulars into a full-fledged regulatory structure to address emerging operational challenges and modernise credit card management in the banking sector.

It focuses on strengthening risk management, protecting customer rights, ensuring transparency in transactions, and encouraging responsible lending by banks. It also seeks to create a more secure and transparent environment to support the gradual expansion of a cashless financial system.

Banks must now follow clearer standards in determining customer eligibility and setting credit limits, while maintaining stricter oversight over repayment capacity, the guideline states.

It also introduces detailed rules on interest charges, fees, billing procedures, and collection practices to reduce disputes and improve transparency for cardholders.

To enhance security, banks have been instructed to strengthen internal control systems, improve fraud monitoring, and establish effective dispute resolution mechanisms.

The guideline further emphasises stronger safeguards for customer privacy and data protection.

The central bank said the revisions were made after reviewing persistent challenges in the sector, including customer complaints, operational irregularities, fraud incidents, and complexities in payment settlement.