Bangladesh Bank (BB) has introduced an instant, end-to-end digital 'e-Payment Credit' facility of up to Taka 10,000 to help eligible customers meet essential and recurring digital payment obligations during temporary liquidity constraints. This new facility allows banks to provide fee-based credit instead of interest-based lending for various payments such as utility bills, mobile recharge, educational fees, healthcare expenses, tolls and tickets, taxes and government service fees, deposit installments and insurance premiums.
How It Works
Under the new facility, credit amounts can range from Taka 50 to Taka 10,000, with applicable fees depending on the repayment tenure of seven, 15 or 30 days. For example, for a credit amount of Taka 7,001-10,000, the maximum fees will be Taka 35 for seven days, Taka 70 for 15 days and Taka 130 for 30 days. The loan principal and applicable fee must be repaid on the due date— the eighth, 16th or 31st day from the date of disbursement, depending on the selected tenure.
Usage and Regulations
The credit can only be used for direct payment to designated billers through approved digital channels and cannot be converted into cash, transferred to a customer's account or added to a wallet. No additional fee, interest, prepayment, early settlement or foreclosure charge will be imposed if the credit is repaid on or before the due date. In case of default, a penalty not exceeding the daily service fee applicable to the initial tenure may be charged for each overdue day, subject to the ceiling based on the 30-day fee for the relevant credit limit.
Bangladesh Bank has stated that all applicable regulations concerning loan classification, provisioning, accounting treatment, write-off, customer protection and other prudential requirements will apply to the facility. Banks will also have to clearly disclose the key terms and conditions, including the nature and amount of credit, tenure, applicable fee and repayment mechanism, before obtaining customers' consent.
Implementation and Security
The central bank has instructed banks to use alternative digital credit-scoring models and determine risk-based credit limits under board-approved policies. Customer onboarding will be conducted through approved digital channels using registered mobile numbers, with identity verification through OTP along with two-factor or multi-factor authentication, or other secure mechanisms approved by the bank. Banks may engage mobile financial service providers, payment service providers, payment system operators and other fintech companies as service delivery channels, subject to Bangladesh Bank regulations.
The circular also requires customers' personally identifiable information and loan-related data to be stored in data warehouses located within Bangladesh, in line with applicable cloud computing and cybersecurity guidelines. However, banks will have to conduct a pilot implementation of the e-Payment Credit facility for at least six months before its commercial launch. Following evaluation and incorporation of feedback, banks will finalize their Product Programme Guidelines and launch the facility commercially with approval from their boards of directors.
Why This Matters for Bangladesh
The introduction of the e-Payment Credit facility is a significant step towards enhancing financial inclusion and providing relief to individuals facing temporary liquidity constraints. By offering a fee-based credit solution for essential digital payments, Bangladesh Bank aims to support customers in managing their financial obligations more effectively. This initiative not only promotes the use of digital payment channels but also encourages banks to adopt innovative credit-scoring models and enhance their digital service delivery mechanisms.
