Bangladesh Bank has introduced a special initiative to help people meet urgent financial needs without depending on others. The initiative, known as the Emergency Payment Service, will allow eligible customers to borrow up to Tk10,000 through banking apps.

However, banks will not disburse the money directly into customers’ accounts as cash. Instead, customers can use the facility to make payments for specific essential services.

The facility will cover payments such as:

Electricity bills

Gas bills

Mobile phone recharges

School fees

Hospital bills

DPS instalments and insurance premiums

How the loan will work

Banks will not provide the money separately through their apps. Instead, they will allow customers to make payments for eligible emergency services up to the approved amount.

Banks will not charge interest on the facility. However, they will charge a fixed service fee, depending on the amount borrowed and the repayment period.

Customers can take the facility for seven, 15 or 30 days.

Service fees

According to Bangladesh Bank, the maximum fees for loans ranging from Tk50 to Tk250 will be Tk3, Tk4 and Tk6 for seven, 15 and 30 days respectively.

For loans of Tk251 to Tk500, the fees will be Tk5, Tk8 and Tk15 for the three repayment periods.

For loans of Tk501 to Tk1,000, the fees will be Tk7, Tk12 and Tk20 respectively.

For loans of Tk1,001 to Tk2,000, the fees will be Tk10, Tk0 and Tk30 respectively.

For loans of Tk2,001 to Tk3,000, the fees will be Tk15, Tk30 and Tk50 respectively.

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

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

For loans of Tk7,001 to Tk10,000, the fees will be Tk35, Tk70 and Tk130 respectively.

Therefore, a customer borrowing Tk10,000 for 30 days will have to pay a maximum fee of Tk130. The fee will be Tk70 for 15 days and Tk35 for seven days.

City Bank sees wider digital adoption

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

“If banks and financial institutions implement the circular, it can address customers’ immediate liquidity needs when they have to make everyday payments,” he said.

He said the initiative could have a wider impact by encouraging customers to use digital payment services.

“When customers start making bill payments through this type of loan facility, digital adoption will increase. This will be an important factor in building a cashless Bangladesh,” he said.

Haider said the circular might not appear very significant at first glance, but it could become an important milestone.

“We consider it a significant milestone. We thank Bangladesh Bank for issuing such a timely circular and hope we will soon be able to reach millions of customers with this facility,” he said.