BB frames draft policy
Scheduled banks will have to take CIB clearance from Bangladesh Bank to issue credit card to their clients so that a single client cannot avail a number of cards from different banks violating the regulation, according to the central bank’s credit card draft policy.
As per the central bank regulation, a client is allowed to receive loan amounting to maximum Tk 5 lakh by using the banks’ credit cards without giving any collateral securities while he or she is able to take loan of maximum Tk 20 lakh with giving mortgage.
But, some clients often take a number of credit cards from different banks resulting that their credit ceiling crossed the credit ceiling violating the regulation.
A BB official told New Age on Wednesday that the central bank had already framed the credit card draft policy in which it would ask the banks to take Credit Information Bureau clearance of the BB to issue the card to their clients.
The banks will be able to know the total credit position of their clients by collecting the CIB report, he said.
The banks will not be allowed to issue fresh credit card if the credit position of a client crosses Tk 5 lakh without collateral securities and Tk 20 lakh with giving mortgage.
The BB will impose punitive measure against the banks if they set credit limit with the credit card of the clients violating the loan ceiling.
Besides, the banks will have to take punitive measures against the credit card defaulters in line with Bank Company Act 1991 meaning that the defaulters would not be allowed to get fresh loan from banks and non-bank financial institutions.
The banks will have to set the credit ceiling to the credit card holders when they issue the card. The banks will have to verify the capability of repaying the loan before issuing the credit card. The banks will have to set the rate of interest and charge on the credit card loan.
The banks will have to mention the rate of interest with the clients’ bill as some banks are now imposing more interest than their declared rate. The banks will have to form fraud prevention committee or taskforce to avoid fraudulent activities through the credit card.
The banks will have to block the lost credit card of the clients immediately and they will inform the central bank in this regard on mandatory basis.
The banks must give insurance coverage for all credit cards and the lost card holders will enjoy the insurance facility.
The BB official said the number of issuing credit card was gradually increasing in the last few years but the majority number of bank was not following the proper rules to impose interest and charge while issuing the cards.
The Financial Integrity and Customer Services Department, a wing of the central bank, received huge allegations from the clients that the banks have imposed excess rate of interest and charge on them.
The security measure of the banks to protect the interest of the credit card holders is also week which fuel up the forgery and fraudulent acts.
The BB official said the new policy would compel the banks to maintain a transparent system to impose rate of interest and charge while issuing the credit card.
The policy will also protect the credit card holders from the fraudulent activities, he said.
-With New Age input
