Considering the demands of banks, Bangladesh Bank has reduced the General Security Provision rate in credit cards. Previously, all the banks used to deduct 5% provision against the loans in credit cards. But, now, declining the rate, Bangladesh Bank has fixed it 2%. This decision has been taken as a part of consecutive initiatives on August 20, 2017 in order to reduce the interest rate of the credit cards.
To avoid the risks, banks usually have to keep provision against the regular loans besides the classified ones. Basically, this amount is usually deducted from profit.
Aiming to reduce the risks in cash transactions and costs in credit card business, the security provision rate has been reduced, as it was informed officially.Source-Prothom Alo