Recently, City Bank launched Digital Loan that allows customers to process loans through bKash app. To put it differently, The Covid-19 pandemic miserably brought about a revolution in digital banking. Not to mention, banks are quickly adopting technology-based products. In other words, they are allowing customers to access banking services from home.
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Consequently, Digital loan is one such product that will give customers an exclusive experience in the country of processing loans through their bKash app. Notably, City Bank launched this facility as a product on a pilot basis, collaborating with bKash. Moreover, This will allow customers to access financing from their handsets.
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Further, It is a collateral-free digital loan where users can request and receive loans of up to Tk10,000 instantly through bKash. In fact, the loan disbursement will be scaled up gradually through the mobile app.
Motivation Behind The Service
In April, the volume of transactions through electronic fund transfer (EFT) increased by 80.43 percent. In other words, it is more than Tk28,417 crore from March. Besides, despite the imposition of the lockdown, the issue of new debit cards rose by 77,664 from March to 1.98 crores in April. In fact, the increasing number of credit cards is now coming up to 16 lakh.
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Furthermore, Card-based e-commerce transactions increased to Tk254 crore in April. The transaction value was Tk224 crore in the previous month. According to data from the central bank, 38,623 fresh customers came into internet banking services in April. To put it differently, that brings the total number of internet banking users to around 27lakh.
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At this instant, City Bank Digital Loan in the pilot phase has a three-month term. Moreover, the loan repayment involves three EMI automatically deducted from the user’s bKash account on the fixed due dates.
Besides that, users can repay the EMI amount earlier than the due date. In addition, save money due to lower interest costs associated with early repayment.
However, interest in the digital loan is applicable on a daily basis. Therefore, in the case of early settlement, users will repay interest based on the number of days for which the loan amount was outstanding. Additionally, users will get the notification through SMS and in-app notification before every EMI due date.
To conclude, loan repayment behaviour will determine whether a user is eligible for loans in the future. City Bank is now under regulatory obligations to report any loan defaulters to the Bangladesh Bank.
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