Back Custom print Link Text Only Rich Text Print

  • Disclosure to Customers: Initial Disclosure Requirements of Key Terms

    • BC-4.2.17

      Retail banks must make clear to potential customers, prior to entering into a credit agreement, all relevant key terms of the agreement in the credit agreement application and 'key terms disclosure' document, in order for them to clearly understand the characteristics of the services and products on offer. Retail banks must also comply with the disclosure requirements under the "Code of Best Practice on Consumer Credit and Charging" (see Appendix CM-2).

      Added: October 2012

    • BC-4.2.18

      This Paragraph was deleted in July 2015.

      Deleted: July 2015
      Added: October 2012

    • BC-4.2.19

      For credit agreements where a retailer extends credit to purchase goods or services by operating in agreement with retail banks, all conditions of the credit agreement must be disclosed in the credit agreement application and 'key terms disclosure' document, including when profit will begin to accrue, along with information on any indirect charges.

      Added: October 2012

    • BC-4.2.20

      Credit agreements, referred to in Paragraph BC-4.2.19, must be finalised with an employee of the retail bank, whether located at the premises of the retailer or at the premises of the retail bank providing the credit. Profit must in no event be charged before the disbursement of funds.

      Added: October 2012

    • BC-4.2.21

      Retail banks must inform the customers on the nature of their contractual relationship with the retail outlet and the customers' rights arising as a result of this relationship.

      Added: October 2012

    • BC-4.2.22

      In addition to the initial disclosure of key terms noted in Paragraphs BC-4.2.17 to BC-4.2.21, the "key terms disclosure" document must at the time of signing the credit agreement, amongst other things, make clear:

      (a) The detailed breakdown of the payments:
      (i) The principal amount and profit per month of the financing facility and the maturity of the credit/financing agreement;
      (ii) The net amount provided to the customer after deducting or applying any upfront or other charges;
      (iii) The total profit payments and principal repayment for the term of the credit agreement; and
      (iv) The total administration/handling fees and any other fees and charges spread over the term of the credit agreement.
      (b) The APR and annual nominal rate as defined in Paragraph BC-4.2.31;
      (c) Whether the rate of profit is fixed or can be varied, and under what circumstances;
      (d) The basis on which profit is charged (e.g. actual reducing balance) and applied to the account (e.g. monthly or quarterly compounding) and whether principal repayments are taken into account in the calculation, together with an illustration of the calculation method;
      (e) The detailed costs associated with alternative arrangements for extending additional credit or early repayments, whether partial or full, of amounts due including the treatment of remaining profit and the payment of premium for takaful;
      (f) Any late payment charges;
      (g) The annual profit rate and credit limit being offered for credit agreements such as credit cards; and
      (h) Any other charges related to the credit agreement not included above.
      Amended: January 2019
      Amended: July 2015
      Amended: April 2014
      Added: October 2012

    • BC-4.2.23

      Retail banks are free to design the layout and wording to be used in their 'key terms disclosure' document, as they see fit, providing they contain the information specified in Paragraph BC-4.2.22. The CBB will monitor compliance with the spirit as well as the letter of the requirements in this Chapter.

      Added: October 2012