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The amount of credit card-based transactions increased by 23.43 per cent or Tk 1,594.7 crore year-on-year in July-December of 2020 as a section of people used the financial product as a last resort for purchasing essential goods due to income erosion amid the COVID-19 outbreak.
Bankers said that people were also becoming more used to online transactions after the coronavirus outbreak.
Bangladesh Bank data showed that the amount of credit card-based transactions rose to Tk 8,400.7 crore in the July-December period of 2020 against Tk 6,806 crore in the same period of 2019.
The number of transactions through credit cards also reached a record high in December 2020.
In December 2020, users made 26.26 lakh transactions by using credit cards while the number of transactions was 25.42 lakh in the same month of 2019, showed the BB data.
Though the credit card usage increased significantly, the number of cards issued by banks and non-bank financial institutions grew by 9.08 per cent or 1,39,614 year-on-year in December 2020.
The number of credit card users increased to 16.77 lakh at the end of December 2020 from 15.37 lakh a year ago.
The credit card business of banks and NBFIs improved in the second half of 2020 but the situation was dismal in the first half when economic activities had remained almost suspended in the country for around two months due to the COVID-19 outbreak.
Mutual Trust Bank managing director and chief executive officer Syed Mahbubur Rahman told New Age, ‘The increase in transactions through credit cards was largely because of income erosion of people during the coronavirus outbreak.’
People used the financial product to buy daily essentials as they had no other option, he said, adding that the credit card customer base of Mutual Trust Bank was over 50,000.
Mahbubur also said that people were also becoming more used to online transactions after the outbreak of coronavirus.
Making payments by using cards are more convenient than payments in cash and the outbreak of coronavirus intensified the tendency, he said.
He said that most of the customers were repaying credit cards dues regularly and the situation was still not worrying.
Card users said that the country’s banks and NBFIs refrained from issuing any additional benefits, including relaxed policy on clearing overdue amount of credit cards, but banks and NBFIs in different countries floated bailout for the credit card-holders, taking the coronavirus-induced joblessness and income erosion situations in consideration.
Besides the surge in credit card-based transactions, the volume of debit card-based transactions also increased by 16.08 per cent or Tk 13,740.5 crore in the second half of 2020 compared with that in the same period of 2019.
In July-December of 2020, the volume increased to Tk 99,194.1 crore from Tk 85,453.6 crore in the same period of the previous year.
