Transaction system gets easier

Swarnomoyee Mostafa Oishy:

The trend of dollar spending through credit cards in the country has increased at an unusual rate that makes the transaction system easier. In the first three months of the current fiscal year, transaction through cards was Tk 1,545 crore, which was Tk 464 crore in the same period of last year.

In other words, compared to the same period of last year, transactions through cards have increased by Tk 1,081 crores (233 percent) from July to September this year.

According to the report of Bangladesh Bank, in the first month of the current fiscal year, credit card transaction was Tk 440.90 crore.

In August, it increased to Tk 520.30 crore. And in September, it exceeded Tk 584.80 crore.

It is known that, the two main sources of cash dollars in the country are expatriates and export earnings. At present, dollars are coming in less from both the sectors. As the Corona situation has normalized, more people than ever are going out of the country for medical, education or urgent needs. Medical, education or tourists are facing major problems due to dollar crisis. Then along with commercial banks, Bangladesh Bank also encouraged customers to make transactions through credit cards. Although, this decision has been given temporarily, many transactions are currently being done through it.

Bangladesh Bank is encouraging people to carry dollars on cards when traveling abroad as the price of dollars increases in the open market. According to Bangladesh Bank related officials, there has been some pressure of cash dollars in the country.

In this situation, if someone goes outside the country and makes credit card transactions as needed, there is no direct pressure on the domestic dollar. The customer has to refund the credit card amount in Bangladeshi currency. Banks are saving some money in this. However, the central bank is monitoring whether someone is spending dollars on the card without need.

Bangladesh Bank’s Executive Director and Spokesperson GM Abul Kalam Azad said, “If anyone wants to do dollar transactions outside the country on a credit card, he or she can do so within the limit. Credit card transactions are increasing as the convenience of transaction methods eases the pressure on cash dollars.”

He further said, It is a kind of digital transaction, not virtual. Because of if there are not enough dollars in the card, the transaction cannot be done.

Earlier, on September 4, Bangladesh Bank found evidence of over-limit transactions in 71 credit cards of 27 banks. In view of this, the institution has issued show cause notices to 27 banks.

According to the central bank, the customer must make credit card transactions within the limits. Banks have to monitor it constantly.

GM Abul Kalam Azad, Spokesperson of Bangladesh Bank said, “Regular monitoring is going on in this regard as part of our supervision.”

After Corona, credit card transactions have increased due to the increase in foreign travel for various needs including medical treatment.

Apart from this, transactions can increase due to the possibility of getting dollars on the card at a low cost. In June 2020, the central bank allowed banks to issue international debit cards against customers’ accounts. With these dual currency cards, various expenses are being spent in the country, including hotel booking abroad and purchases of a certain amount. Apart from this, many people are carrying foreign currency endorsements on their cards, while going abroad.

According to the rules of Bangladesh Bank, a maximum of $12,000 can be spent on the card annually. Banks sell dollars to customers both in cash and on cards. Until now, it cost less to get dollars on cards than cash. Recently, BAFEDA (Bangladesh Foreign Exchange Authorized Dealers Association) has made the exchange rate of dollar on cards the same as cash.

Association of Bankers Bangladesh (ABB) Chairman and Managing Director of private BRAC Bank Salim RF Hossain said, “The cost of dollars would have been lower, if the card had been taken so far. Because of this, the amount of dollars taken on the card may increase.”