BRPD Circular Letter No. 52: Rationalization of Interest Rate on Credit Card

Bangladesh Bank Chief Executive Office Motijheel, Dhaka-1000 Bangladesh Ref No.: BRPD Circular Letter No. 52 Banking Regulation and Policy Department 01 December 2024 BRPD Circular Letter No. 52 Date: ------------------- 16 Agrahayan 1431 Managing Director / Chief Executive Officer All Scheduled Banks operating in Bangladesh Dear Sir, Regarding Rationalization of Interest Rate on Credit Card

1. Reference is invited to BRPD Circular Letter No. 47 dated 24 September 2020 on the above subject.

2. Through the aforementioned circular, instructions were issued regarding the rationalization of interest rates along with the provision of credit facilities against credit card limits, and to protect customer interests, a maximum interest rate of 20% was prescribed for credit cards.

3. Now, to ensure sound loan risk management and to keep policy interest rates consistent with the increasing cost of funds of banks, a maximum interest rate of 25% has been prescribed for credit cards. Banks will determine the interest rate on credit cards within this limit, subject to loan demand and the supply of lendable funds.

4. In addition, other instructions of BRPD Circular Letter No. 47/2020 will remain unchanged.

5. Islamic Shariah-based banks will take necessary measures to determine profit rates in accordance with the aforementioned instructions in their area of investment.

6. These instructions are issued under the powers conferred by Section 29(2)(c) and Section 45 of the Bank Company Act, 1991.

7. These instructions will come into effect from 01 January 2025.

Yours faithfully, (Mohammad Shahriar Siddique) Director (BRPD) Phone: 9530252