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  • Disclosure to Customers: Initial Disclosure Requirements of Key Terms

    • BC-1.4.13

      Licensees must make clear to potential customers, prior to entering into a credit agreement, all relevant key terms of the agreement in the credit application and 'key terms disclosure' document, in order for them to clearly understand the characteristics of the services and products on offer.

      January 2014

    • BC-1.4.14

      The above 'key terms disclosure' document must be summarised in plain English and Arabic. This document must be signed and dated by the customer(s) in duplicate as having been read and understood, prior to signing a credit agreement. One copy should be retained by the customer and the other must be retained by the licensee in their customer file.

      January 2014

    • BC-1.4.15

      In addition to the initial disclosure of key terms noted in Paragraphs BC-1.4.13 and BC-1.4.14, the "key terms disclosure" document must, amongst other things, make clear:

      (a) The detailed breakdown of the payments:
      (i) The principal amount being borrowed and the maturity of the credit agreement;
      (ii) The net amount provided to the customer after deducting or applying any upfront or other charges;
      (iii) The total interest/profit payments and principal repayment for the term of the credit agreement; and
      (iv) The total administration/handling fees and all details of any other fees and charges spread over the term of the credit agreement;
      (b) The APR and the nominal annual rate as defined in Paragraphs BC-1.4.10 and BC-1.4.4(b) respectively;
      (c) Whether the rate of interest/profit is fixed or can be varied, and under what circumstances;
      (d) The basis on which interest/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 "top-ups" of credit agreements or other alternative arrangements for extending additional credit or early repayments, whether partial or full, of amounts due including the treatment of remaining interest/profit and the payment of premium for insurance;
      (f) Any late payment charges; and
      (g) Any other charges related to the credit agreement not included above, all details of which must be provided to the customer.
      January 2014

    • BC-1.4.16

      Licensees 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-1.4.15. The CBB will monitor compliance with the spirit as well as the letter of the requirements in this Chapter.

      January 2014