Bangladesh Bank has taken steps to suspend payment services for unauthorised online loan apps following allegations that they charge exorbitant interest rates and harass and blackmail borrowers.

The central bank has instructed all scheduled banks, the Bangladesh Financial Intelligence Unit (BFIU), Bangladesh Telecommunication Regulatory Commission (BTRC), licensed payment service providers (PSPs), mobile financial service (MFS) providers and Nagad, the postal department’s digital financial service, to take immediate measures to stop payment services for individuals and entities operating the identified apps.

The Payment Systems Supervision Department of Bangladesh Bank recently issued a letter to the concerned institutions, a central bank source confirmed.

According to the letter, some mobile apps operating through online platforms are providing loans illegally without approval from Bangladesh Bank. Borrowers using these apps have reportedly suffered financial losses because of excessive interest charges.

The central bank also warned that such apps may gain access to users’ contact lists, personal and sensitive information, photographs, videos and SMS messages stored on their mobile phones.

When borrowers refuse to repay loans along with the high interest demanded, operators allegedly threaten to publish their sensitive information and photographs on social media. They are also accused of resorting to blackmail and other forms of harassment.

Citing Section 15(2) of the Payment and Settlement Systems Act, 2024, Bangladesh Bank said no person or entity can conduct activities related to collecting investments, providing loans, holding money or financial transactions through online or offline platforms without approval from the central bank.

As the lending activities conducted through the identified apps are being carried out without such approval, Bangladesh Bank considers them illegal and punishable offences under Section 37(1) of the law.

The letter further noted that payment service providers facilitating transactions connected with such illegal lending activities may also be considered involved in the offences.

Citing Section 18(4) of the Act, the central bank has proposed the immediate suspension of payment services for the individuals and entities controlling the identified mobile apps.

Bangladesh Bank also urged the concerned institutions to undertake effective public-awareness measures against the apps in the public interest and to protect the country’s payment system.

The banks, MFS providers and PSPs concerned, as well as Nagad, have been asked to take necessary measures and report the actions taken to the Payment Systems Supervision Department by September 15, 2026.

The move comes amid growing concerns over unauthorised digital lending, misuse of customers’ personal information and harassment in loan recovery as the use of financial services through digital platforms continues to expand.

Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said the activities themselves do not fall directly under the central bank’s mandate, but it is taking action against fraudsters considering the risk of people being deceived.

“People also need to become more aware. They should understand that loans are not distributed through social media. Loans are provided by banks, non-bank financial institutions and microcredit institutions,” he said.

He added that Bangladesh Bank has repeatedly warned people about such fraudulent activities, but many still fall into the traps of fraudsters. Therefore, he urged people to remain vigilant when seeking loans through digital platforms.