BOT seeks better info on all financial products for bank clients
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As a means of strengthening consumer protection, the Bank of Thailand has asked commercial banks to provide clear and comprehensive information to customers on all financial products, and to tell them they have the right to file a complaint if they are un
“Such a rule is aimed at protecting consumers through a better information-disclosure standard. The BOT’s purpose is to have consumers really understand financial products, as the information given presently is not very clear. Only lending rates are disclosed clearly,” Krirk Vanikkul, the central bank’s deputy governor for Financial Institutions Stability, said yesterday.
On Tuesday, the central bank circulated a letter to commercial banks, asking them to provide information on all aspects of all their financial products for consumers within three months.
Until now, the highest priority for banks has been the provision of credit information, particularly for home loans, where several commercial banks have had promotional campaigns offering initial repayment periods with zero- or 1-per-cent interest.
Consumers have been provided information on their real borrowing costs over the term of the mortgage, but for fairness such information should also be given for other financial products, according to the central bank.
Prior to Tuesday’s circular, the BOT had discussed with commercial banks four principles and practices that it wanted to see in operation.
Firstly, customers have the right to actual and “all-sided” information on all financial products.
Second, after receiving such information, customers have the right to decide whether to purchase.
Third, if they feel they have been subject to any unfairness, they can negotiate with commercial banks.
Finally, if they suffer any financial damages in the future, affected customers will receive relief measures.
The BOT, taking a prudent approach, is allowing a three-month pilot period in order to test the new rule and system.
Although there would be no penalty if a commercial bank failed to improve its information disclosure, Krirk said the new rule would enable a consumer to file a case against an institution about whose behaviour it felt aggrieved.
