Wednesday, November 2, 2011

BANKS SEEK ARBITER OVER LOANS BLACKLIST DISPUTES

By George Ngigi  November 1  2011 at  BusinessDaily

Bankers will create an ombudsman’s office to address customer complaints regarding use of credit referencing bureaus (CRB), the industry lobby organisation has said.
The Kenya Bankers Association (KBA) said the office will arbitrate on emerging issues on use of CRBs, such as the reported blacklisting of customers whose dormant accounts had fallen to negative balances due to accumulated bank charges.
Some bank customers have also claimed they were black listed due to erroneous reconciliation of loan accounts, and did not have an avenue to have their issues resolved.
“We are proposing amendments to the CRB regulations to introduce the office of an ombudsman who will listen to customer disputes that may not be resolved by the CRB and commercial bank as provided for under the current regulations,” said the KBA chief executive, Habil Olaka.
The credit reference regulations currently allow customers to raise complaints in not more than 100 words of the aspects that he/she considers inaccurate in his report.
The credit bureau is required by law to insert the statement to the borrower’s credit report while the reporting bank investigates the complaint in a maximum period of 15 days.
If erroneous, the CRB deletes or amends it and within five days of having received the resolution notice, inform everyone who has accessed the report over the previous twelve months.
But if no agreement is reached, the complaining customer will now appeal through the office of the ombudsman whose ruling will be final.
“The decisions of the independent ombudsman will be binding on the banks,” said Mr Olaka.
Mr Olaka saidthe association was preparing guidelines to be issued to banks clarifying on what constitutes a credit facility in order to prevent any misuse of the system.
The latest Central Bank quarterly report indicates that commercial banks had requested 1,060,865 credit referencing reports by end of September indicating increased reliance of the reports in the process of loan appraisals.
An individual is entitled to one free report in a year and to a free copy of the report within 30 days of being notified of their listing. By end of December 2010 only 434 credit reports had been requested by customers against 284,722 made by banks.
“The challenge is to increase public awareness on the credit information sharing mechanism and the right to access a free credit report from a licensed bureau at least once a year by customers,” said the Central Bank industry report for the year 2010.
Kenya Bankers association said it had also noted that much more sensitisation is required to assist all parties -lenders, borrowers and credit bureaus-clarify any grey areas and hence would be rolling out an awareness campaign early next year.
Currently there are two registered credit reference bureaus in the country being CRBAfrica and Metropol Bureau.

No comments: