Bangladesh Bank's First Rulebook for Islamic Credit Cards Bans Hidden Profit and Growing Late Fees

If you carry, or are thinking about getting, a Shariah compliant credit card in Bangladesh, the rules around it just got a lot more specific. Bangladesh Bank has issued its first comprehensive operational guidelines for Islamic credit cards, spelling out exactly how banks can charge you, what they cannot charge you, and what happens if your card is lost or a payment is late. Here is what actually changed, and what it means the next time you look at your statement.

• Banks can no longer earn profit or interest on card purchases, cash advances or late payments, only a fixed service fee tied to their actual cost.
• Late payment penalties must be a fixed, pre agreed charity donation, not a charge that grows the longer you are late.
• You get a five business day cooling off period to cancel a new card without penalty, and must get 30 days' notice before any fee changes.
• Banks must block spending on categories Islamic law prohibits, including alcohol, gambling, tobacco and cryptocurrency trading.

What Bangladesh Bank Just Set Out

The directive replaces profit and interest based charges on Islamic credit cards with two specific Islamic finance concepts: Qard Hasan, an interest free loan, and Ujrah, a fixed service fee. In practice, this means every purchase you make, every cash advance you take, and every payment you delay is treated as an interest free loan from the bank to you. The bank is allowed to charge you a flat fee for providing that service, but it cannot charge you more the longer you take to repay, and it cannot calculate that fee as a percentage of what you owe. Any scheduled bank that already offers Islamic banking can issue taka denominated Islamic credit cards under these rules. A card that lets you spend in foreign currency, or carries a dual currency function, still needs the issuing bank to hold an Authorised Dealer licence.

How an Islamic Credit Card Now Differs From a Conventional One

The clearest way to see what changed is to put the two side by side. A conventional credit card in Bangladesh typically charges interest that compounds the longer a balance goes unpaid, along with late fees that can escalate. An Islamic card under the new rules works on a fundamentally different logic.

Feature	Conventional credit card	Islamic credit card under new BB rules
Cost of carrying a balance	Interest, often compounding	No interest or profit, only a flat Ujrah service fee capped at actual cost
Late payment charge	Fee or penalty interest that can grow with time	Fixed charity donation agreed upfront, cannot escalate, not booked as bank income
Cash withdrawal fee	Often a percentage of the amount withdrawn	One fixed amount only, percentage based fees banned
Merchant discount commission	May be passed through to cardholder in some structures	Cannot be passed to cardholder, excess refunded or donated to charity
Prohibited spending	Not restricted by product design	Alcohol, gambling, tobacco and cryptocurrency trading blocked by merchant category code

What It Means for You If You Carry One of These Cards

If you already hold an Islamic credit card, the most immediate practical change is in how a missed or partial payment gets treated. Instead of a penalty that can balloon the longer you take to pay, the charge is now a fixed amount decided in advance, which at least makes the worst case cost predictable. Cash withdrawals are also capped at half your credit limit, so if you were relying on an Islamic card for larger cash advances, you may need to rethink that. Before committing to a new card or a cash advance, it is worth running the actual repayment cost through BD Financial Review's EMI calculator so you know what a given repayment schedule really costs you, Islamic or conventional.

The Fine Print on Fees, Penalties and Fraud

A few protections are worth knowing in detail. You now have five business days after a card is approved to cancel it without any penalty, which gives room to back out if the terms turn out not to suit you. Banks must give you 30 days' notice before changing any fee or charge, so a sudden shift in your statement should not happen without warning. If your card is lost or stolen and used fraudulently, you are not liable for those transactions, and once you report the loss, the bank must refund any unauthorised transactions within seven working days, a firm deadline that did not exist in the same form before. On the Shariah compliance side, banks must run annual audits of their Islamic card operations, submit compliance reports within two months of each year end, and if a transaction is later found to be non compliant, the bank must donate the earnings from it to charity rather than keep them.

Quick FAQ

Can my bank still charge me extra for carrying a balance? No. Under the new rules it can only recover a fixed service fee tied to its actual cost, never a profit margin or anything resembling interest.

What happens if I pay late? You owe a fixed, pre agreed charity donation rather than a fee that increases the longer you delay, and the bank cannot count that amount as its own income.

Can I use an Islamic credit card to buy cryptocurrency or at a bar? No. Banks must block these and other categories Islamic law prohibits directly at the point of sale, using merchant category codes.

How much cash can I withdraw on an Islamic credit card? Up to 50% of your approved credit limit, and the withdrawal fee must be a single flat amount rather than a percentage of what you take out.