Who Is Eligible for Interest-Free Bank Loans?

Bangladesh Bank has introduced a new initiative aimed at helping people meet urgent financial obligations without having to rely on others for short-term funds. Under the Emergency Payment Service, eligible customers will be able to borrow up to Tk10,000 through banking apps.

The facility, however, will not provide customers with cash directly. Instead, the approved amount can be used to make payments for selected essential services.

Payments covered under the facility include:

• Electricity bills

• Gas bills

• Mobile phone recharges

• School fees

• Hospital bills

• DPS instalments and insurance premiums

How the facility works

Banks will not disburse the loan amount separately into customers’ accounts. Rather, customers will be able to make payments for eligible emergency services through their banking apps, up to the approved borrowing limit.

The facility will be interest-free, although banks will charge a fixed service fee based on the amount borrowed and the repayment period.

Customers will be able to repay the facility within seven, 15 or 30 days.

Service fees

According to Bangladesh Bank, the maximum service fee for loans between Tk50 and Tk250 will be Tk3 for seven days, Tk4 for 15 days and Tk6 for 30 days.

For loans between Tk251 and Tk500, the fees will be Tk5, Tk8 and Tk15, respectively.

For Tk501 to Tk1,000, the maximum fees will be Tk7, Tk12 and Tk20.

For Tk1,001 to Tk2,000, the fees will be Tk10, Tk20 and Tk30.

For Tk2,001 to Tk3,000, customers will pay Tk15, Tk30 or Tk50, depending on the repayment period.

For Tk3,001 to Tk5,000, the maximum fees will be Tk20, Tk40 and Tk70.

For Tk5,001 to Tk7,000, the fees will be Tk25, Tk50 and Tk90.

For loans between Tk7,001 and Tk10,000, the maximum fees will be Tk35 for seven days, Tk70 for 15 days and Tk130 for 30 days.

Therefore, a customer using Tk10,000 for 30 days would pay a maximum service fee of Tk130. The fee would be Tk70 for 15 days and Tk35 for seven days.

City Bank expects wider digital adoption

City Bank PLC Deputy Managing Director Aroop Haider said the initiative could help customers manage short-term liquidity shortages when they need to make routine payments.

He said implementing the Bangladesh Bank circular could help address customers’ immediate financial needs while also encouraging greater use of digital payment services.

According to Haider, wider use of such loan-based payment facilities could accelerate digital adoption and contribute to Bangladesh’s transition towards a cashless economy.

He described the initiative as a significant milestone and thanked Bangladesh Bank for introducing the facility, expressing hope that it would eventually reach millions of customers.

Who will be eligible?

The facility will be available to customers using banking apps in Bangladesh, including City Bank’s Citytouch, bKash’s Astha, Islami Bank’s CellFin, Dutch-Bangla Bank’s NexusPay and Sonali Bank’s banking app.

However, simply having a banking app will not automatically make a customer eligible. Individual banks will determine whether a customer qualifies for the facility.

According to the report, Bangladesh currently has around 2.5 crore banking-app users. These customers could potentially access the facility, subject to approval by their respective banks.