Bangladesh Bank has warned the public against various mobile applications that offer loans online, amid allegations that such apps collect users’ phone contacts and other sensitive personal information during registration, including photos, videos and text messages.

The central bank issued the warning in a press release on Thursday (September 3).

According to Bangladesh Bank, it has recently observed cases in which customers who obtained loans through such apps were later asked to repay unusually large amounts of money. The borrowers were also allegedly subjected to harassment, including blackmail and threats to publish their personal information and photographs on social media.

The relevant authorities said that under Section 15(2) of the Payment and Settlement Systems Act, 2024, providing loans through such apps without approval from Bangladesh Bank is completely illegal. Such activities constitute a punishable offence under Section 37(1) of the law.

The press release said individuals involved in providing loans through unauthorised apps are directly committing a punishable offence. At the same time, registering with such apps, taking loans and conducting financial transactions through them may also expose users to the risk of becoming involved in criminal activities.

Concerns have also been raised over the security of users’ personal information. In particular, granting these apps access to a phone’s contact list, photographs, videos and text messages could result in both borrowers and their acquaintances being subjected to harassment later.

In view of the situation, Bangladesh Bank urged everyone to refrain from participating in illegal lending activities operated through online mobile apps. It also advised people to verify the legitimacy of the relevant institution or service provider and confirm whether it has approval from Bangladesh Bank before taking any loan.