With the aim of increasing financial inclusion and creating a 'cashless society', Bangladesh Bank has given the opportunity to launch 'e-loans' or digital loans in the country.
As a result, customers will now be able to take loans of up to Tk50,000 through internet banking, mobile apps or e-wallets without going to the bank. The loan tenure will be a maximum of one year.
On Monday, the Banking Regulation and Policy Department (BRPD) of Bangladesh Bank issued a circular in this regard.
The circular states that customer selection, loan approval, disbursement and collection - all activities will have to be completed completely digitally.
The physical presence or signature of the customer will not be required for loan application and approval.
Instead, the customer's identity will have to be confirmed through biometric information.
Bangladesh Bank said that banks will be able to disburse these loans at market-based interest rates.
However, if loans are given under the full financing facility of the central bank, the interest rate will have to be limited to a maximum of 9 percent.
OTP, two-factor authentication or multi-factor authentication have been made mandatory to protect customer information. In addition, all customer personal information and loan-related information must be stored in a data warehouse within the country.
Before launching this service commercially, banks will have to conduct a piloting or 'piloting' activity for at least six months. Instructions have also been given to evaluate the success of the pilot project and submit its report to Bangladesh Bank.
The circular also said that for now, there will be some relaxation in loan approval until the real-time CIB (Credit Information Bureau) facility is launched. However, after the loan is disbursed, the customer's CIB report must be collected and stored. No fee can be charged from the customer for this.
The central bank has clearly stated that this facility cannot be given to any defaulting borrower. If a customer takes a loan by hiding information and later it is identified in the CIB report, then the concerned bank will have to immediately adjust that loan.