STAR BUSINESS REPORT

The Bangladesh Bank (BB) has allowed scheduled banks to launch fully digital “e-loan” services of up to Tk 50,000, stepping up efforts to widen financial inclusion and support the transformation towards digital transactions.

In a circular issued yesterday, the central bank said customers will be able to take e-loans for up to 12 months through end-to-end digital processes. These will cover customer onboarding, loan approval, disbursement and recovery.

Banks have been instructed to include the term “e-loan” in the service name and ensure that all stages of lending are conducted digitally, without physical documents or branch visits.

The move comes at a time when digital lending services are rapidly expanding globally due to increasing smartphone penetration, internet usage and mobile financial service adoption.

In many countries, banks and fintech firms now offer instant small-ticket loans through banking apps, e-wallets and other digital platforms, expanding access to credit and reducing reliance on informal borrowing.

The BB said the increasing use of digital devices in banking, along with expanded internet and mobile network coverage, has raised demand for digital lending through internet banking, mobile apps, mobile financial services and e-wallets.

“The availability of such services can play a vital role in promoting financial inclusion, familiarising marginal populations with digital financial services, and achieving the vision of a cashless society,” the central bank said in the circular.

Banks will be allowed to set market-based interest rates for e-loans. However, the rate cannot exceed 9 percent if they avail themselves of refinancing facilities.

The central bank has instructed lenders to clearly communicate all loan-related information, including annual interest rates, tenure, repayment methods, the disbursement process and any additional charges, before obtaining customer consent.