Bangladesh Bank cuts term loan early settlement fee by 75pc

Staff Correspondent | Published: 22:59, Jun 10,2021

 
 

The Bangladesh Bank on Thursday slashed early settlement charge by 75 per cent for term loans as the central bank found the charge creates inconveniences for the borrowers if they intend to pay back loans before the tenure.

The central bank issued a master circular on the day on the schedule of charges the banks will be allowed to slap on their customers. The master circular also includes all the existing circulars issued by the BB in this connection.

Banks will now be allowed to slap the highest 0.5 per cent instead of 2 per cent as early settlement charge on the borrowers’ outstanding loan amount that would be settled before the term of repayment.

Thursday’s BB circular also barred the banks from slapping any early settlement charge or any such fees on the demand loan or cash credit for the adjustment of such loans before the expiry of tenure.

Besides demand for loans, the central bank also asked banks not to impose any early settlement charge in case of settlement of loans early by the cottage, micro and small entrepreneurs.

A senior BB official said that the latest circular would be a great help for the bank borrowers to settle loans before the tenure as many borrowers refrain from settling loans early mainly because of the high early settlement charge.

Apart from slashing the early settlement charge, the central bank also set several other charges in its master circular, which were not mentioned in its previous circulars, so that the banks cannot impose any additional fees on their customers, he said.

The BB circular also barred banks from slapping any charge for activation of dormant account and encashment of term deposit, FDR and deposit pension scheme before maturity.

Banks are also barred from slapping any fee or charge as minimum balance fee, incidental charge, ledger fee, service charge and counter transaction fee on savings or current accounts.

The master circular would also make it easier for the customers to resist if any bank imposes any additional fee on them, the BB official said.

Earlier, it was difficult for the customers to go through the BB’s all the circulars issued since 2009 and protest or lodge a complaint with the BB if they were slapped with any additional charge, he said.

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