BB Moves to Break Nation’s Cash Habit

Bangladesh Bank is moving to put small-ticket digital credit at consumers’ fingertips, directing scheduled banks to introduce an e-payment credit facility of up to Tk10,000 in a major push to accelerate cashless transactions and reduce the economy’s dependence on physical cash.

Under the new framework, eligible customers will be able to access Tk50 to Tk10,000 in digital credit to pay utility bills, mobile recharges, education and healthcare fees, tolls, taxes, insurance premiums, travel expenses and other approved payments.

The credit, however, will never reach the customer as cash. It must be paid directly to the designated service provider through an authorised digital payment channel.

The initiative is designed to help customers meet essential expenses when they temporarily lack sufficient funds, while keeping the transaction within the formal digital financial system, central bank officials said.

The facility will be available for seven, 15 or 30 days, with banks charging prescribed service fees instead of interest.
For credit ranging from Tk50 to Tk250, the maximum service fee will be Tk3 for seven days, Tk4 for 15 days and Tk6 for 30 days.

At the top end, loans of Tk7,001 to Tk10,000 will carry maximum fees of Tk35, Tk70 and Tk130 for seven, 15 and 30 days respectively.

Customers who repay on time will face no additional interest or early-settlement charges, although penalties may apply to overdue payments within the prescribed limits.

Crucially, borrowers will not be allowed to withdraw the credit as cash, transfer it to another bank account or load it into a mobile wallet. The facility is strictly tied to approved digital payments.

Banks must initially operate the scheme as a pilot for at least six months. Commercial launch will require an assessment of the pilot and approval from the respective bank’s board.

The entire process�"from customer onboarding and credit assessment to payment and repayment�"must be completed digitally using secure authentication systems, including one-time passwords and two-factor or multi-factor authentication.

Banks may partner with mobile financial service providers, payment service providers and fintech firms, potentially giving the facility broad reach across the country’s rapidly expanding digital-payment network.

The move comes as Bangladesh’s financial sector is already witnessing the emergence of branchless, data-driven lending.
City Bank, in collaboration with bKash, already offers eligible customers digital loans ranging from Tk500 to Tk50,000 through the bKash platform, without physical paperwork or traditional collateral. The borrowing limit is determined by customers’ credit eligibility and digital transaction behaviour.

But there is a crucial difference.

While the City Bank-bKash facility provides a broader digital loan, Bangladesh Bank’s new e-payment credit is strictly payment-linked: the money cannot be cashed out or transferred and must go directly to an authorised biller.

The City Bank-bKash model therefore demonstrates the growing appetite for app-based formal credit, while the new Bangladesh Bank framework seeks to push digital borrowing deeper into everyday cashless transactions.

The development signals a significant shift in Bangladesh’s financial landscape�"from branch-based lending and cash payments towards instant, digital and purpose-specific credit.

For banks and fintech companies, the initiative could open a new frontier for data-driven lending and customer acquisition. For consumers, it could provide a quick digital lifeline for routine payments without the need to visit a bank branch.