Bangladesh Bank has issued fresh directives for the introduction of fully digital “e-loan” services as part of efforts to make banking services faster, more accessible and technology-driven. Under the new framework, customers will be able to apply for loans, receive approval and access funds entirely online through mobile applications or bank websites, eliminating the need to visit a physical branch.
The central bank’s Banking Regulation and Policy Department issued the circular on Monday (11 May) and sent it to the chief executives of all scheduled banks operating in the country. The directive outlines the regulatory structure under which banks must introduce and operate e-loan services.
According to the circular, banks have been instructed to launch e-loan operations to make financial services more customer-friendly through the use of digital technology. The initiative is designed to streamline the lending process and provide customers with quicker access to formal credit facilities through secure online channels.
Under the new rules, an individual customer will be eligible to obtain an e-loan of up to Tk50,000. The tenure of such loans has been capped at a maximum of 12 months. This means that borrowers must repay the loan within one year from the date of disbursement.
The interest rate on e-loans will be determined by banks based on market conditions. However, where refinancing facilities are utilised, the maximum interest rate charged to customers cannot exceed 9 per cent. This provision has been included to ensure affordability for borrowers while allowing banks flexibility in determining pricing structures in accordance with prevailing financial market conditions.
The circular further states that the entire lending process must be completed digitally. This includes loan application submission, customer verification, approval procedures, disbursement of funds and repayment of instalments. No physical documentation or branch-level processing will be required if the customer satisfies all digital verification requirements.
For customer identification and verification, banks have been instructed to use national identity card verification, biometric authentication and other approved digital verification systems. These requirements are intended to ensure that digital lending operations remain secure and compliant with existing financial regulations.
Before approving any e-loan application, banks must review the customer’s Credit Information Bureau (CIB) report. This has been made mandatory to assess the applicant’s existing credit exposure and repayment behaviour. Customers classified as loan defaulters will not be eligible for this facility.
Bangladesh Bank has also emphasised transparency in all customer dealings. Banks must clearly disclose all applicable charges to borrowers in advance. This includes interest rates, processing fees, service charges, late payment penalties and any early repayment fees. The circular explicitly states that no additional charge may be imposed without the customer’s prior consent.
To strengthen cyber security protections, banks have been directed to implement robust digital authentication mechanisms. These include two-factor authentication (2FA), multi-factor authentication (MFA) and one-time password (OTP) systems. The central bank has also instructed banks to comply strictly with existing laws and regulations governing customer data protection and privacy.
In addition, each bank must formulate its own internal e-loan policy before launching the service. This policy must receive approval from the bank’s board of directors. Banks are also required to ensure adequate information technology risk management capacity before rolling out the service to customers.
The circular notes that operational readiness, cyber resilience and proper risk management frameworks are essential prerequisites for launching digital lending products. Banks must ensure their technological infrastructure is capable of handling digital loan processing securely and efficiently.
The introduction of e-loan services marks a significant regulatory step in Bangladesh’s ongoing digital banking transformation. By enabling customers to access small-value loans remotely through digital platforms, the central bank aims to simplify credit access while maintaining regulatory oversight, customer protection and financial sector security standards.