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Categories
| Banks under fire for exorbitant administrative charges |
| Politics & Government 2009 | |||
| Written by Yong Min Wei | |||
| Wednesday, 01 July 2009 23:23 | |||
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Chong Chieng Jen (Bandar Kuching–DAP) said many banks were charging between RM50 and RM60 for bankruptcy search while a government website only imposed a RM10 fee for a similar search. He alleged some financial institutions also had exorbitant charges of RM100 to RM200 for printing a full set of loan documentation or S&P agreements when requested by the customers. “Previously, the deputy finance minister said Bank Negara will come out with guidelines but till now it’s not out,” he said when debating the Central Bank of Malaysia Bill 2009 today. The bill was passed at the Dewan Rakyat today evening but not before several parliamentarians from both sides of the divide asked BNM to study the logic for banks’ outsourcing the clearing of cheques to private companies at a processing centre. According to Chong, there were also instances where cheques were rejected by banks merely because the handwriting on the “payee” was different with that on the issued sum, thus causing customers to be subjected to pay a penalty for a bounced cheque. “This should not be the case, there should be uniformity and clarity practised by banks,” he pointed out. Meanwhile, Hamim Samuri (Ledang–BN) raised concerns that banks were still easily relying on the Credit Tip-Off Service (CTOS) despite the government’s directive not to fully rely on it, stressing that loan applications had been delayed or rejected due to the names of applicants appearing on CTOS database. “Many local bank branches tend to deny applications due to CTOS. The information on CTOS is not 100% accurate. Sometimes the names are wrong and is not updated,” he said, adding that housing loan applicants were forced to pay interest charges to the seller when their applications were delayed as a result. He added that the reliance of banks on CTOS, which at times caused unnecessary hiccups to applicants, did not go well with the government’s effort to stimulate the economy and create a multiplier effect. The Ledang MP also raised the issue that third party insurance for motor coverage had been raised in some instance by some 200% recently and that such a surge would be burdensome especially for those in the rural areas. As a result, Fuziah Salleh (Kuantan-PKR) asked the government to explain on the “double standards” practised in the 10% rebate for motor insurance renewal as vehicle owner only get such rebates if they renewed the policy directly with the insurance companies and not through insurance agents. The House also heard there was a need to have BNM review the terms and conditions for credit cards applications especially among the younger generation as it is believed that some 10% of the card holders were below the age of 25 years and did not have steady income. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah told the House that the Association of Banks had agreed to allow banks to use CTOS in processing loan applications provided it received the consent of the applicants. He also said that motor vehicle owners who were compelled by insurance companies to purchase personal accident coverage as a pre-condition for third party insurance to lodge a police report on the matter.
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