Bangladesh Bank issues first full Islamic credit card guidelines

By the Editorial Team · Wednesday, September 30, 2026

Bangladesh Bank has issued its first detailed guidelines for Islamic credit cards, mandating interest-free lending, capped fees, and strict rules to ensure compliance with Shariah principles. These measures aim to protect consumers from debt exploitation, restrict funding sources, and enforce ethical transaction standards while allowing banks to offer taka-denominated Islamic credit cards under regulated conditions.

Bangladesh Bank has introduced its first comprehensive guidelines for Islamic credit cards, aiming to align credit card services with Shariah principles and prevent banks from profiting on growing customer debts or late payments. The guidelines, released on September 29, allow any scheduled bank offering Islamic banking to issue taka-denominated credit cards, while foreign-currency and dual-currency cards require authorized dealer status for foreign exchange operations.

Under the new framework, all credit purchases, cash advances, or delayed payments will be treated as Qard Hasan—a type of interest-free loan. The bank is prohibited from charging interest on the money lent, instead being permitted to collect only fixed service fees (ujrah) tied to identifiable services. Importantly, these cards cannot be funded by Mudarabah deposits, which involve profit-sharing investment accounts held by customers.

Bangladesh Bank has placed strict limits on fees banks can impose. Charges related to card issuance, renewal, account maintenance, and cash advances must not exceed the actual direct cost of providing the service and cannot be used to generate profit. Variable charges dependent on outstanding balances, credit limits, or the duration of payment delays are explicitly banned. For example, if issuing and maintaining a card costs Tk 800 annually, the bank may charge that fixed amount but cannot levy a proportional fee based on the credit limit.

The guidelines include specific provisions concerning late payments. Cardholders must commit in advance to donate a fixed sum to charity if they fail to meet payment deadlines. This amount remains constant irrespective of how late the payment is made, and the bank may not retain these donations as income.

Consumer protections are also featured in the new rules. Applicants have a five-business-day cooling-off period during which they may cancel their application, and banks must provide 30 days’ notice before making changes to charges or terms. Fraud losses are borne by the bank, with refunds from unauthorized transactions guaranteed within seven working days after the card is reported lost or stolen. Cash withdrawals using the card are capped at 50 percent of the credit limit, and banks are required to set conservative borrowing limits to deter customer over-indebtedness.

To ensure compliance with Shariah law, transactions involving prohibited goods or services, such as alcohol, gambling, tobacco, and cryptocurrency trading, are blocked at the point of sale using Merchant Category Codes. Banks are required to conduct annual Shariah audits and submit consolidated reports to Bangladesh Bank within two months of their financial year-end. Any income found to contradict Shariah principles must be donated to charity.

Bangladesh Bank has indicated that it may update the guidelines or issue further clarifications in the future.

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