PETALING JAYA: Bank Negara should stop allowing banks to charge fee for loan documents which borrowers sign when taking,for example, a housing loan, says the Bar Council.
Its Conveyancing Practice Committee chairman Datuk Roger Tan also expressed the council’s regret that despite several representations made to Bank Negara Malaysia, the Central Bank has failed to put a stop to this unhealthy practice which unfairly increases the financial burden on consumers.
“Surely, the Central Bank cannot be waiting for the Federal Court to intervene again before it decides to act on it just like in the case of the British borrower Anthony Lawrence Bourke and wife who succeeded in declaring that it was unconscionable for banks to seek refuge behind exclusion clauses.
“The Central Bank must lead and spare a thought for the borrowers and solicitors who are often at the mercy of this unequal bargaining with the powerful financiers, ” said Tan in a statement yesterday.
Tan pointed out these documents are largely standardised documents for each bank.
“The bank’s solicitors will typically download the documents from the bank’s website and, after completing the particulars relating to the borrower and the loan, print for the borrower’s signature, ” said Tan.
He added that currently, the bank will charge a fee for ‘purchase’ of these documents ranging from RM100 to RM500, even though the cost of printing the documents is borne by the solicitors.
This fee is often passed on to the borrows as part of the solicitor’s charges, he said.
“This results in the borrowers having to pay additional costs when taking a loan from a bank and the solicitors getting peanuts for the professional work done especially purchasers of low and medium cost and affordable homes,
Meanwhile, Tan lauded the move by commercial banks to stop charging for over-the-counter cash and cheque transactions for credit card and financing repayment.
The Star reported on Thursday that the fee for making credit card and loan payments over the counter with cash or cheques was RM2 per transaction, and 50 sen for payments made using cash deposit machines and cheque deposit machines.
In response, the Association of Banks in Malaysia (ABM) said 26 commercial banks in Malaysia would stop charging the fees.
Meanwhile, Finance Minister Lim Guan Eng commended the move by commercial banks to drop the charges after heeding the ministry’s advice and listening to public feedback.
“The charges was implemented in December 2017 under the previous government to promote the transition to e-payment, ” Lim said in a statement yesterday.
“However, the charges are a burden to lower income groups and those with no Internet access to conduct online transactions, ” he said.
“At the same time, ABM showed that they are not obsessed with profitting from fees and charges by abolishing it for the first time since it was introduced in 2017, ” he said.