Credit card late fee reinstated

From now on banks will be able to impose late payment fees on credit cardholders as they did earlier since the Bangladesh Bank withdrew its restriction on the issue in line with the lifting of shutdown.

Besides, mobile financial services (MFS) providers will also follow suit. They can put charge for any person-to-person transaction, which was free from April to date for up to Tk 40,000 monthly transaction.

The central bank issued a notice on Wednesday in this regard. It said the previous instructions have been withdrawn as the country’s trade, shops and transportation have reopened.

Interest can be imposed on unpaid credit card bills from the day immediately following the last date for payment of credit card bills as per the BB notice. However, no interest can be charged from the date of transaction.

The BB said lenders will be able to impose charge on late fees for only one time.

Before the move, the central bank asked banks on April 4 that if the date of payment of credit bill is fixed in the midst of government-declared strict restriction, the date of payment has to be rescheduled within five working days following the withdrawal of restriction.

The BB said late fees cannot be imposed amid the strict restriction announced by the government and lenders can be charged interest only on the principal amount, according to the April-4 notice.

The providers of mobile financial services will be able to decide on the imposition of person-to-person (P2P) transaction charges according to their own business policy.

The BB made free of charge of the P2P monthly transaction up to Tk 40,000 due largely to the economic hardship created by the pandemic.

However, the monthly P2P transaction limit of Tk 2,00,000 remains unchanged.

In April last year, the central bank asked lenders not to impose any late payment fees on credit cardholders, who are finding it difficult to clear the bills due to the restriction of movement when the Covid-19 hit the country for the first time.