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Bangladesh Bank orders changes to credit card guidelines

Bangladesh Bank orders changes to credit card guidelines

DHAKA: Bangladesh Bank is updating the credit card operation guidelines of authorised banks to better manage the risks to their businesses and to protect the interest of customers. The central bank issued a circular on Thursday directing the CEOs of all commercial banks across the country to implement the new measures with effect from January 1, 2018. The new guidelines concern the issuance of supplementary credit cards, the terms of contracts, interest or profit rates, various charges, and the billing process. According to the central bank’s circular, the card issuers will be allowed to issue foreign currency or dual currency supplementary credit cards. Also affected by the changes are the collection or recovery mechanisms, fraud control, and security of the cards.

Bangladesh Bank wants a PIN code or biometric safety measure at every point of sale outlets (POS) for card security. In addition, a PIN code for all domestic face-to-face POS transactions, 3D Secure Application for e-commerce transactions, SMS and email alert for credit card transaction shall also be ensured. The central bank’s circular said: “The enlisting of merchants shall be done on due diligence and evaluation. The card issuer shall educate the merchants about the use of POS machine, genuineness and security features of credit card, signature verification and their rights and responsibilities under the agreement.”

The central bank also said the interest or profit rate on the outstanding amount on the credit card should not exceed 5% of the highest interest rate offered in any credit of the respective bank. “Interest or profit shall be charged on the unpaid amount due for payment,” the circular said. “In the event of a due date falling on a Friday, Saturday or any other public/bank holidays at the beginning of each year, the card issuer shall allow the grace period (holiday) as required for payment to be made on the next working day,” the circular said. Telephone calls and visits for recovery of unpaid dues should be limited to a convenient time as/to be defined in the published policy of the card issuer and communicated to customers at the time of issuance of credit card.