The Bangladesh Bank has asked banks not to charge compound interest on credit card bills until May 31 as users are facing difficulties in paying their monthly bills on time amid the ongoing coronavirus crisis.
On Wednesday, the central bank issued a circular, saying some banks are imposing compound interest on unpaid monthly bills. As a result, cardholders have to bear the burden of extra interest, which is unacceptable at this critical moment.
"So, do not impose compound interest on bills on a daily or monthly basis from March 15 to May 31," Bangladesh Bank instructed lenders in the circular.
"Banks that have already charged compound interest on the unpaid monthly bills of March must return the amount or adjust it to the next bill," it said.
The central bank had earlier asked banks not to charge late payment fees on credit cards until May 31.
The decision will help card users as some of them have already failed to pay their bills due to the impacts of coronavirus on the economy and businesses.
According to the central bank data, till January, 59 banks issued 15.56 lakh credit cards and the transactions in January stood at Tk1,357 crore.
Earlier, the central bank had asked banks not to classify borrowers as defaulters for their failure to repay loans till June.
Every bank has a particular date set for monthly bill generation and also due payment dates. If any client fails to pay a monthly bill on time, banks impose late payment fees and applicable interest from the credit generation date.