Bangladesh Bank has introduced an initiative aimed at helping customers deal with urgent payment needs when they temporarily lack sufficient funds. Under the proposed emergency payment service, eligible users of participating banking applications may be able to access short-term loans of up to Tk 10,000.
The facility is intended for essential payments rather than unrestricted cash withdrawals. Customers will not receive the borrowed amount directly in their bank accounts. Instead, the approved sum will be used to settle specific bills and payments through the banking application.
The initiative is designed to reduce the need for customers to depend on friends, relatives or other informal sources of money when an immediate payment is due.
What can the loan be used for?
The emergency facility will cover a range of essential expenses. These include electricity and gas bills, mobile phone recharges, children’s school fees and hospital bills.
Customers may also use the facility to pay instalments for DPS accounts held with a bank, as well as insurance premiums.
The arrangement means that a customer facing a temporary shortage of funds could complete an eligible payment through their banking application and repay the amount within the specified period.
No interest, but a fixed charge will apply
The facility will not carry interest. However, banks will be allowed to collect a prescribed service charge based on the amount borrowed and the repayment period.
Customers will have three repayment periods: seven days, 15 days and 30 days. Bangladesh Bank has set maximum charges for different loan brackets.
For loans between Tk 50 and Tk 250, the maximum charges will be Tk 3 for seven days, Tk 4 for 15 days and Tk 6 for 30 days.
For amounts ranging from Tk 251 to Tk 500, the charges will be Tk 5, Tk 8 and Tk 15 respectively. Loans between Tk 501 and Tk 1,000 will carry charges of Tk 7, Tk 12 and Tk 20.
For loans of Tk 1,001 to Tk 2,000, the maximum charges will be Tk 10, Tk 20 and Tk 30 for seven, 15 and 30 days respectively. For Tk 2,001 to Tk 3,000, the charges will be Tk 15, Tk 30 and Tk 50.
A loan between Tk 3,001 and Tk 5,000 will carry charges of Tk 20 for seven days, Tk 40 for 15 days and Tk 70 for 30 days.
For amounts between Tk 5,001 and Tk 7,000, the maximum charges will be Tk 25, Tk 50 and Tk 90.
At the highest loan bracket, between Tk 7,001 and Tk 10,000, customers will pay a maximum charge of Tk 35 for seven days, Tk 70 for 15 days and Tk 130 for 30 days.
Therefore, a customer taking Tk 10,000 for 30 days would repay Tk 10,130 in total. For a 15-day period, the total would be Tk 10,070, while a seven-day loan would require repayment of Tk 10,035.
Which banking app users may qualify?
The facility is intended for customers who use participating banks’ mobile banking applications. The services mentioned in connection with the initiative include City Bank’s Citytouch, Islami Bank’s CellFin, Dutch-Bangla Bank’s NexusPay and a dedicated application operated by Sonali Bank.
The number of banking application users in Bangladesh is estimated at around 25 million, according to the information provided in the report. However, using one of these applications will not automatically guarantee access to the loan.
Individual banks will determine which customers meet the eligibility requirements and will take the final decision on granting the facility.
Banks see potential for wider digital payments
Arup Haider, deputy managing director of City Bank PLC, said the initiative could help customers overcome temporary shortages of immediately available funds when making routine payments.
He said the short-term facility could address an immediate need, but its potential impact could extend beyond emergency payments. As customers become more accustomed to settling bills through banking applications, digital payment adoption could increase.
Haider also described the initiative as potentially significant for the country’s wider shift towards digital transactions. In his view, greater use of such facilities could encourage customers to rely more on digital channels for everyday payments.
He expressed hope that banks would implement the service soon and make it accessible to a large number of customers.
The proposed facility therefore combines short-term payment support with the wider push towards digital banking. For customers, its main attraction is the absence of interest, although the applicable service charge and the bank’s eligibility requirements will need to be considered before using the facility.
