Bangladesh Bank has introduced an initiative aimed at helping banking app users meet urgent day-to-day payment needs without having to depend on others for short-term cash. Under the proposed emergency payment service, eligible customers may be able to access loans of up to Tk 10,000 through participating banking applications.
The facility will not operate like a conventional cash loan. Instead, the approved amount will be used directly to settle specified payments, meaning customers will not receive the borrowed money as freely usable cash in their bank accounts.
What the facility can cover
The emergency payment service is intended for essential and time-sensitive expenses. These include:
- Electricity bills
- Gas bills
- Mobile phone recharges
- School fees for children
- Hospital bills
- Instalments for DPS accounts
- Insurance premiums
The arrangement is designed for situations in which a customer needs to make an immediate payment but does not have sufficient funds available at that moment.
Rather than transferring the loan amount to the customer’s account, the banking application will provide an option to complete the eligible payment using the approved credit facility. The customer will then be required to repay the amount within the selected repayment period.
No interest, but a service charge applies
Although the facility will not carry interest, participating banks will be permitted to charge a fixed fee. The amount will depend on both the size of the loan and the repayment period.
Customers will have repayment options of seven, 15 or 30 days. Bangladesh Bank has specified maximum charges for different loan brackets.
For loans ranging from Tk 50 to Tk 250, the maximum charge will be Tk 3 for seven days, Tk 4 for 15 days and Tk 6 for 30 days.
For amounts between Tk 251 and 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 the three repayment periods.
For loans from Tk 1,001 to Tk 2,000, the maximum charges will be Tk 10, Tk 20 and Tk 30. For Tk 2,001 to Tk 3,000, the charges will rise to Tk 15, Tk 30 and Tk 50.
A loan of Tk 3,001 to Tk 5,000 will attract 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 corresponding charges will be Tk 25, Tk 50 and Tk 90.
At the highest level, loans between Tk 7,001 and Tk 10,000 will carry maximum charges of Tk 35, Tk 70 and Tk 130 for seven, 15 and 30 days respectively.
This means a customer borrowing Tk 10,000 for 30 days would repay Tk 10,130 in total, while the total repayment would be Tk 10,070 for a 15-day term and Tk 10,035 for seven days.
Who may qualify?
The facility is intended for people who use participating banks’ mobile applications. Examples mentioned include City Bank’s Citytouch, Islami Bank’s CellFin, Dutch-Bangla Bank’s NexusPay and Sonali Bank’s own banking application.
The source report says Bangladesh currently has around 25 million banking application users. However, being an app user alone will not guarantee access to the facility. Individual banks will make the final decision on whether a customer qualifies for the emergency payment service.
Eligibility may therefore depend on the respective bank’s assessment and implementation of the Bangladesh Bank directive.
Banks see wider digital payment potential
Arup Haider, deputy managing director of City Bank PLC, said the initiative could help customers deal with temporary shortages of immediately available funds when they need to make routine payments.
He also highlighted the potential longer-term impact of encouraging customers to use digital channels for everyday transactions. If people become accustomed to paying utility bills, fees and other essential expenses through banking applications using such short-term facilities, digital payment adoption could increase.
According to Haider, the initiative may therefore have significance beyond its immediate purpose of addressing short-term liquidity needs. Greater use of app-based payments could also contribute to reducing reliance on cash as digital transactions become more familiar to customers.
Haider described the Bangladesh Bank directive as a potentially significant milestone and expressed hope that banks would implement the facility soon and make it available to a large number of customers.
The initiative comes as Bangladesh’s financial sector continues to expand digital banking and app-based payment services. By linking short-term emergency credit with specific payments rather than unrestricted cash withdrawals, the proposed system is intended to provide immediate support while keeping the facility focused on essential transactions.
