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The Bank of Ghana (BoG)’s statement titled “Bank of Ghana’s Responsible Borrowing Guidelines,” announcing that undisclosed charges in loan agreements should be considered null and void, and commercial banks and lenders should refund borrowers who have been subject to such orders.
The BoG has directed lenders to provide borrowers with a “Pre-Agreement Truth” statement before they sign a loan agreement. The report should outline all the conditions of the loan, including interest rates, APR, charges, repayment schedules, bundled products and services, and penalties. The BoG has advised borrowers to seek professional advice to ensure they understand the terms and conditions before signing a loan agreement.
The BoG has also directed lenders to provide borrowers with the full outstanding amount if they wish to pay off a loan earlier than scheduled. Lenders must allow the borrower 20 working days to effect the full repayment, and any settlement penalty fee should not exceed 0.25 percent of the principal amount to be paid.
The BoG has explained that the move is to promote transparency and adequate disclosure practices in the financial sector. It empowers borrowers to shop for better rates and loan conditions, while promoting responsible borrowing and repayment practices.
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Source:Omanghana.com/SP
