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Dhaka, Bangladesh (BBN) - The central bank of Bangladesh has issued guidelines on credit card operations of banks aiming to ensure transparency along with mitigation of risks in the business.
Under the new guidelines, the credit card issuer banks will have to develop comprehensive institutional policy on credit card operations and code of conduct duly approved by its board of directors.
These will be published in their official website.
“The card issuer shall also disclose those to the customers throughout the marketing process,” the Bangladesh Bank (BB), the country’s central bank, said in its guidelines, issued on Thursday.
It also said the terms and conditions relating to the credit card will be simple, clear and understandable.
“Any stipulation, caveat, clause or provision which may cause an unreasonable curtailment of rights of the customers shall not be included in the terms and conditions,” it noted.
About interest/profit rates and other charges, the guidelines said the interest/profit rate on the outstanding amount of credit card will not exceed 5.0 per cent of the highest interest rate offered in other consumer credits.
“Interest/ Profit should be charged on the unpaid amount due for payment,” it explained.
The method of calculation of interest/profit and other charges, number of days, minimum payment due, outstanding unpaid amount, etc. will be clearly explained and properly disclosed to the customers.
Any revision in the schedule of interest/profit rates, charges/fees, or terms and conditions and revision of any incentive, shall be communicated to all active cardholders in legible writing/electronic means at least thirty (30) days before the effective date of such revision, according to the guidelines.
“To minimize the financial and any other associated risks, Card Issuer shall have prudent and sound management, administrative, accounting and control procedures.” It noted.
The card issuers will have to review effectiveness of those arrangements and procedures periodically and should be updated accordingly, it added.
BBN/SSR/AD