Up to Tk 10,000 loan via banking apps for emergency bill payments

Bangladesh Bank has initiated a move to introduce instant loan facilities of up to Tk 10,000 through banking apps for paying emergency service bills and prescribed fees. The loan amount cannot be withdrawn in cash and can only be used to pay designated bills or fees. The facility, named 'e-payment credit', is being launched on a pilot basis.

According to a circular issued by Bangladesh Bank's Banking Regulation and Policy Department-1 on Sunday (September 6), the move aims to address temporary cash shortages and encourage digital transactions . Eligible customers can avail loans ranging from Tk 50 to Tk 10,000 .

The loan can be used to pay electricity and gas bills, mobile recharge, education and medical expenses, travel costs, taxes and government service fees, loan or deposit instalments, and insurance premiums .

Banks will initially operate the facility on a pilot basis for at least six months . After reviewing the pilot results, it may be rolled out commercially with board approval . Customers will have up to 30 days to repay the loan, with banks charging a service fee based on the tenure instead of interest .

Fees range from Tk 3 to Tk 130 based on the loan amount and repayment period . For example, a Tk 10,000 loan for 30 days would incur a maximum fee of Tk 130 . The loan must be repaid, along with the applicable fee, on the 8th, 16th or 31st day depending on the tenure. Early repayment is allowed without any penalty.

Customers can apply for the loan through their bank's app if their account balance is insufficient when making eligible payments . The entire process, from application to fund disbursement and repayment, will be digital, with the loan amount being sent directly to the service provider's account . Banks can partner with mobile financial services, payment service providers and fintech firms to implement the facility.