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Banks are charging customers 25 to 27 percent in interest on credit card debt, in violation of regulations, the Bangladesh Bank said.
Bangladesh Bank has imposed a new 20 percent cap on credit card interest.
Under the guidance above, banks were supposed to cap the interest charged on credit cards by 5 percent more than the highest interest rate charged on other credit products.
In April, the Bank of Bangladesh imposed a 9 percent cap on interest rates on credit products, but found that many banks continue to charge customers between 25 and 27 percent in interest on credit card debt. credit, in violation of regulations.
As such, the central bank has imposed a 20 percent interest rate cap on credit cards.
The Bangladesh bank also said that banks can only charge interest on loans taken with a credit card after the payment deadline date (not from the transaction date), and can charge a fee only once per any late payments.
Banks are also prohibited from allowing cash withdrawals that exceed 50 percent of the credit limit allowed on a credit card. Banks have been ignoring this limit, thereby expanding their own credit risks, the Bangladesh Bank said.
Lenders are instructed to adhere to the 50 percent maximum cash withdrawal limit.
The new instructions will go into effect on October 1.
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