Credit card issuance by banks grew at a faster pace in 2022 compared to the year prior as there is a growing interest among people to avail the benefits offered by plastic money, such as interest free loans for up to one-and-a-half months. 

As such, credit card issuance reached a four-year high of 2.82 lakh last year, up 15 per cent from 1.93 lakh in 2021, according to data released by Bangladesh Bank earlier this week.

With this growth, the total number of credit cards issued in the country stood at 21.15 lakh as of December 2022.

However, bankers and other players in the financial sector said credit card issuance would have grown much faster had the National Board of Revenue (NBR) not slapped a new rule requiring proof of income tax return for availing plastic money.

"It is a good sign that the total number of credit cards has increased, but the growth would have been accelerated if there was no requirement to submit proof of income tax return," said Md Mahiul Islam, head of retail banking at Brac Bank, a leading bank in the credit card segment.

The NBR imposed the rule for the current fiscal year despite facing opposition.

As a result, the demand for loans through credit cards has slowed, as per Bangladesh Bank data.

At the end of December 2022, loans taken through credit cards grew 12 per cent year-on-year to Tk 2,498 crore from Tk 2,229 crore.

Credit card transactions grew 42 per cent in 2021 from the previous year, central bank data showed.

"Credit card has become a lifestyle product. Demand and use of credit cards are growing in line with the growth of consumerism," said Md Shafquat Hossain, head of retail banking at Mutual Trust Bank (MTB), which issued around 45,000 credit cards in 2022.

"We have seen the growth of restaurants as people are increasingly showing interest to dine out, and credit cards provide them the scope to pay later," Hossain said, adding that credit cards have become a necessity for making payments while travelling abroad.

Many carry multiple credit cards to enjoy offers by banks and firms, said the official of the MTB, which has issued 105,000 cards so far.

Hossain then said the MTB gave more focus on credit cards in 2021 and got a good response as the MTB card users can use the MTB's airport lounge.

Syed Mohammad Kamal, country manager of MasterCard Bangladesh, said the rule of tax return submission has affected the growth momentum.

The growth could have been higher, he added.