Why is this important
This strengthens the protection of borrowers’ rights: they will be informed about changes — dates, amounts, debt balance — in a timely manner and reduces the risk of disputes, delays, and penalties due to lack of awareness.
What happened
- The Central Bank noted that some banks include a clause in the agreement: “information on the changed schedule is provided only upon the client’s request”.
- The regulator insists that this violates Article 66 of the Law “On Banks and Banking Activities”, which prohibits denial of information, and the provisions of the Law “On Protection of Consumer Rights”.
Banks are obliged to:
- Remove such restrictive clauses from future contracts;
- To amend existing agreements so that such terms lose their force;
- Automatically send borrowers updated schedules with the debt balance, dates, amounts of all payments, and interest without requiring a request.
- The regulator emphasizes: the schedule is a part of the loan agreement. If the client doesn’t learn about the changes, they may miss out, receive extra charges, or be fined.
Context
Previously, there were complaints in the market that borrowers learned about the change in terms too late, which provoked misunderstandings and legal disputes.
The Central Bank’s step is part of a broader course towards increasing transparency and balance of power between banks and clients. For banks, this will require the technical adaptation of notification systems and the revision of contract templates.
