1% supervision charge on personal, auto loan principal only once a year
The circular specifies that the supervision charge can be collected once a year. No charges or interest at a compound rate shall be levied on these charges
From now on, banks can collect a 1% supervision charge along with the interest on Cottage, Micro, Small, and Medium Enterprise (CMSME) loans, as well as personal and auto loans in the consumer financing sector. However, this charge can only be imposed once a year on the loan principal.
Recently, the Bangladesh Bank has noticed that several banks are collecting additional money from borrowers by calculating charges in multiple ways. Therefore, the central bank has issued a circular and given instructions to the management of all banks.
The circular specifies that the supervision charge can be collected once a year. No charges or interest at a compound rate shall be levied on these charges.
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Furthermore, the circular states that in the case of charging on a term loan, the charge will be calculated based on the principal amount. This charge will be calculated after customers have paid their monthly and quarterly loan instalments.
Additionally, the daily average outstanding balance of the working capital loan must be calculated as the basis for the supervision charge. No penalty or interest shall be levied on the supervision charges.
A central bank official said banks are deducting money from customers in various ways, referred to as supervision charges. According to this circular, such charges will only be levied once a year, and they will be applied solely on the loan principal.
He further explained that if a person has a principal amount of Tk50,000 and pays an instalment of Tk500, then their next instalment will be charged based on Tk49,500.
According to the circular, the supervision charge for an advance loan should be adjusted once upon the expiration of the loan period. However, if it is collected before the maturity date, it will be collected for that period.
No supervision charge will be levied on any loan prior to 19 June 2023. However, in the case of any debt, if it has already been collected, it has to be returned to the customer.
Apart from this, in the case of Sharia-based banks, the mentioned instructions will be followed in their investment.
