Banks get a boost from Eid sales thru' credit cards
Banks are offering discounts on home appliance purchases through credit cards this Eid-ul-Azha as they look to cash in on the shopping frenzy surrounding the religious festival.
Typically around the time of Eid-ul-Azha, the demand for refrigerators and freezers soars, as people look to ensure that the meat of the sacrificial animals is well-preserved for long.
At present, most home appliance vendors are offering about 5 percent discount, and if the items are bought with credit card then another 7-8 percent discount is applied.
Moreover, credit card users have the option of availing equal monthly instalment facility on home appliance purchase, thereby spreading the payment load to a period of 6 months and up to 36 months without having to pay any interest.
"Banks' first motive for offering these facilities is to promote a cashless society," said Abdus Sabur Khan, senior vice-president and head of the card division of Southeast Bank, which has tagged discounts of 5 to 8 percent on different brands' appliances.
Such offers increase customers' access to consumer items. Not least, the credit card enables them to arrange a large amount of money easily.
"All three parties -- the bank, the merchant and the customer -- are benefitting from the offers," said Khan.
The discounts are boosting the sales of electronics stores and banks are getting commission against the sales, he added.
The manager of Samsung Electronics' Karwan Bazar branch agreed with Khan, saying sales through credit card soared 40 percent last month.
"These credit card offers have made home appliance purchase more affordable," said Md Shahriar Nur, adding that the discounts will continue until the eve of Eid-ul-Azha.
The offers are to boost credit card use and give convenience to customers, said Mohammad Anwar Hossain, senior vice-president and head of the card division of Mutual Trust Bank.
"Freezers and refrigerators are the topmost priority for customers this festival," said a salesman of Sony Rangs outlet at Paltan in the capital.
The central bank has cut banks' cost for loans for credit card usage with the view to encouraging digital transaction in the economy.
On August 20, the Bangladesh Bank slashed the provisioning requirement to 2 percent from 5 percent against all unclassified credit card loans under consumer financing.
The move was taken to promote cashless, secured transaction and bring down the cost of operation of the credit card business. The BB increased the loan limit on credit card as well as set the highest limit on interest rate, favouring consumers.
In May, the central bank set the cap at 5 percent plus the highest interest rate on any loan. The move will reduce the average interest rate on credit card to 20 percent from 30 percent earlier.
A month earlier, the central bank doubled the credit card limit to Tk 10 lakh from previous Tk 5 lakh.
Comments