Bangladesh Bank is going to introduce online Credit Information Bureau (CIB) reports of banks and financial institutions this week that would bar loan defaulters from contesting elections. Talking to BSS today, Chief Election Commissioner (CEC) Dr ATM Shamsul Huda welcomed the central bank’s new initiative.
“Online CIB reports would help the commission to identify the loan defaulters and take prompt decision in canceling their nomination papers,” said the CEC.
In the past, the EC had to wait for days to get information about loan defaulter candidates and many candidates had won the elections by keeping the commission, the banks and financial institutions in the dark.
From now on, loan defaulters would not be able to hide information from the Election Commission (EC) and the concerned bank and financial institution the central bank opens the much- awaited online CIB report service on July 19. Governor of the central bank Dr Atiur Rahman is expected to inaugurate the service at its Motijheel head office. All 47 banks and 39 other financial institutions would be able to collect CIB report using this online service.Following the existing law of the land, the CIB report will include the name of an individual who has defaulted repayment of at least Taka 50,000 loan, bank sources said.

News: The Independent/ Bangladesh/ July-17-2011

Bangladesh Bank (BB) will start providing online information of its Credit Information Bureau (CIB) reports to banks and non-banking financial institutions (NBFIs) from July 19, which will make faster the lending services and will eventually cut the cost of doing business. BB Governor Dr Atiur Rahman will inaugurate the online service at the central bank’s headquarters in the capital city, bringing an end to the manual, time consuming and cumbersome process of sharing the important credit information among banks and financial institutions.
All the 47 banks and 29 NBFIs of the country will be able to collect the online CIB reports on July 19 and onwards. The banks and financial institutions would also be able to collect the CIB reports from the central bank physically if they want, the central bank officials said.
“This is a part of the continuous process of digitizing the central bank and the country’s banking sector to ensure efficient, faster and transparent services to the people,” Dr Rahman told BSS today. He said the online service will make the CIB reports only a click away, which now takes five to seven days.
The report, however, used to take at least three months before Dr Rahman was made the governor. The governor said the faster CIB reports would cut the cost of doing business when the banks, NBFIs and respective persons would get it without going to the persisting hassles and longer time-frame. “The Election Commission (EC) and other government organizations and agencies can also get necessary information to determine whether any particular person is a loan defaulter or not,” he said, observing that this convenient and accurate information would help combat credit related corruption.
Besides, Dr Rahman said the central bank would ensure better use of its manpower after introducing the online CIB reports as only five to seven staff can handle the entire system whereas few hundred people are now doing the jobs. The governor said the huge manpower, which is now busy in handling over 5,000 CIB reports every month, would be use their skill in other necessary services of the central bank.

News: The Independent/ Bangladesh/ July-12-2011

Bangladesh Bank would introduce E-Payment Switch and E-Payment Gateway soon to make financial transitions easier, BB Governor Dr Atiur Rahman said yesterday.

“The central bank will introduce E-payment Switch with World Bank fund and E-payment Gateway will be set up with our own financing,” he said while addressing the launching programme of web portal ‘Akhoni.com’, a digital marketing and e-commerce website, at a hotel in Dhaka.

Through using the website, visitors will be able to get discounts from popular businesses and services which include restaurant, hotel, theatre, fashion house, internet service, transport, beauty parlor, saloon and others.

Customers can sign up to get regular deal alert through their e-mail free of cost. They can receive the deal voucher instantly on their web browser and through e-mail by making payment instantly using VISA, MasterCard and DBBL Nexus card or can also choose to book the deal online and pay cash when the coupon is delivered to their home. In that case, customers will have to show the voucher at the merchant location to enjoy the offer.

Speaking as chief guest Dr Atiur hoped that the online marketing website benefit the youngsters to market their products.

Shameem Ahsan, CEO of Akhoni.com, said, “At the age of E-commerce revolution, formation of Akhoni.com is not just a mere need of time. We believe that the website will be the medium for a more competent Bangladesh.”

Former Presidents of Bangladesh Association of Software and Information Services (BASIS) A Towhid, Habibullah N Karim, Swroar Alam and Rafiqul Islam Rowly, among others, were present on the occasion.

News: Daily Sun/ Bangladesh/ Jun-12-2011

Bangladesh Bank has asked all private commercial banks and foreign banks operating in Bangladesh to disburse at least 2.5 per cent of their respective total loans/advances for agricultural and rural sectors. The central bank on Monday issued a circular to this effect that would come into force from July 1 this year, the beginning of the new fiscal.
Any bank failing to follow the central bank directive will have to deposit an amount equal to the shortfall in loans/advances to Bangladesh Bank for one year, the circular said. The central bank directive, however, will not be applicable for the state-owned banks as these banks have already been disbursing more than 2.5 per cent of their respective loans/advances for the agricultural and rural sectors.

News: The Independent/ Bangladesh/ May-17-2011

Credit card is a very common instrument for our day to day life, it is known as plastic money also. At present in Bangladesh most of the private commercial banks offer the credit cards to there customers, but still it remains question how many of them are aware about the credit card.

A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card creates a revolving account and grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.

A credit card is different from a charge card: a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card, which can be used like currency by the owner of the card. Most credit cards are issued by banks or credit unions, and are the shape and size specified by the ISO/IEC 7810 standard as ID-1. This is defined as 85.60 × 53.98 mm (3.370 × 2.125 in) (3-3/8 × 2-1/8 in) in size. Credit is a method of selling goods or services without the buyer having cash in hand. A credit card is only an automatic way of offering credit to a consumer. According to Encyclopedia Britannica, "the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers." However, references to credit cards have been made as far back as 1890 in Europe. Early credit cards involved sales directly between the merchant offering the credit and credit card, and that merchant's customer. Around 1938, companies started to accept each other's cards. Today, credit cards allow you to make purchases with countless third parties. At presents credit cards comes from different format with different limit. And the card holders have the choise of purchase through the card from his own country as well as through out the world. Credit cards were not always been made of plastic. There have been credit tokens made from metal coins, metal plates, and celluloid, metal, fiber, paper, and now mostly plastic cards. In 1950, the Diners Club issued their credit card in the United States. The Diners Club credit card was invented by Diners' Club founder Frank McNamara and it was intended to pay restaurant bills. A customer could eat without cash at any restaurant that would accept Diners' Club credit cards. Diners' Club would pay the restaurant and the credit card holder would repay Diners' Club. The Diners Club card was at first technically a charge card rather than a credit card since the customer had to repay the entire amount when billed by Diners Club. The another type of plastic card is debit card. The basic difference between the debit card and the credit card is, by the debit card one may withdrawl the amount which is available to their account but in case of credit card one may withdrawl the amount which is sanctioned by the bank without the availability of the certain fund.

American Express issued their first credit card in 1958. Credit cards were first promoted to traveling salesmen (more common in that era) for use on the road. By the early 1960s, more companies offered credit cards, advertising them as a time-saving device rather than a form of credit. American Express and MasterCard became huge successes overnight. At present The City Bank in Bangladesh distribute and maintain the American Express Credit card. Bank of America issued the BankAmericard (now Visa) credit card later in 1958.

Credit cards are issued by a credit card issuer, such as a bank or credit union, after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card. Merchants often advertise which cards they accept by displaying acceptance marks – generally derived from logos – or may communicate this orally, as in "Credit cards are fine" (implicitly meaning "major brands"), "We take (brands X, Y, and Z)", or "We don't take credit cards". When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a card not present transaction (CNP).

Electronic verification systems allow merchants to verify in a few seconds that the card is valid and the credit card customer has sufficient credit to cover the purchase, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or point-of-sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system is called Chip and PIN in the United Kingdom and Ireland.

For card not present transactions where the card is not shown, merchants additionally verify that the customer is in physical possession of the card and is the authorized user by asking for additional information such as the security code printed on the back of the card, date of expiry, and billing address.

Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect. Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The credit issuer charges interest on the amount owed if the balance is not paid in full (typically at a much higher rate than most other forms of debt). In addition, if the credit card user fails to make at least the minimum payment by the due date, the issuer may impose a "late fee" and/or other penalties on the user. To help mitigate this, some financial institutions can arrange for automatic payments to be deducted from the user's bank accounts, thus avoiding such penalties altogether as long as the cardholder has sufficient funds.

The benefits of credit card is for the issuer, the card holder and the marchent. The card issuers gets the interest from the card holder and also provide the service to them. And the marchents gets the advantages to sell the product on credit and the card holder gets the support to purchase the product at the time of there need. A credit card may be benefited for all if it is maintained properly.

- Article Written By: Md. Mahfuzur Rahman, BankInfoBd

References:
http://inventors.about.com/od/cstartinventions/a/credit_cards.htm
http://www.creditcards.com/credit-card-news/credit-cards-history-1264.php
http://en.wikipedia.org/wiki/Credit_card