Credit Check Update

Please ask your banker on this issue the next time your credit history needs to be checked.

This issue has been brought up since the CTOS incident recently.

Banks to get go-ahead from applicants for credit check

KUALA LUMPUR: Banks will ask for written consent from loan applicants before checking their financial history with credit reference agencies.

However, if consent is not given, loan applications may take longer to be processed.

Association of Banks in Malaysia (ABM) chairman Datuk Seri Hamidy Hafiz said commercial banks have decided to take a proactive role to seek written consent from loan applicants before checking their clients’ financial history with credit reference agencies.

He said ABM reached the decision although there was no directive from Bank Negara on the matter.

“From now on, all the nine local banks and 13 international banks under the ABM umbrella will seek a customer’s written consent through the loan application forms before conducting a background search on the client’s financial status,” he told a press conference yesterday.

Also at the press conference were OCBC Bank (M) Bhd director and chief executive officer Datuk Albert Yeoh Beow Tit, Maybank president and CEO Datuk Amirsham A. Aziz and ABM executive director Wong Suan Lye.

To a question, Hamidy said that if applicants refused to give their consent, loans “will not be automatically rejected but it will definitely slow down the process of approval.”

“Banks have their own comprehensive credit evaluation process to ascertain the creditworthiness of a customer such as his track record and repayment capability.

“The information provided by credit reference agencies will help banks in their evaluation process and speed up approval,” he said, adding that banks did not rely on information from one source only.

”We still have the central bank’s C-CRIS or central credit reference information system to assist us. But while C-CRIS assists us in identifying loan obligations, it does not tell of the legal suits that a loan applicant may be facing.”

Amirsham said the more options banks have, the easier it would be to process applications.

The ABM move, however, has drawn mixed reaction from consumer associations.

Federation of Malaysian Consumers Associations secretary-general Mohd Sha’ani Abdullah pointed out that Bank Negara has yet to pass any directive on the issue.

“Despite the statement by the Finance Ministry on July 5 advising banks to obtain a borrower’s consent before acquiring information on his financial history, it is shocking that Bank Negara has done nothing about it.”

National Consumer Complaints Centre director Darshan Singh said: “We hope that Bank Negara will at least suspend commercial bank’s use of credit reference agencies until a proper solution is found.”

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Comments
One Response to “Credit Check Update”
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