Recently, I went around looking for personal loan for a decent friend of mine. My friend is a commercial vehicle mechanic who has been working for ten years with a company. His only setback for his loan application as I can see is his employer paid cash for salaries of workers and staff. Therefore there is no record of salaries in his savings account. I guess it has been the practices of companies in a small town with all the major banks’ branches are located. There must be special reason why companies are not crediting the salaries of their staff to their savings accounts.
We approached few banks and to our surprise, the banks are imposing weird conditions for personal loan applications and these conditions are not stated anywhere in the criteria for such application. Be it in their web sites and brochures about personal loan financing. And the best part is every time we walk in the bank and complete the application forms, the bank staff required him to open a savings account with a deposit of a minimum of RM20 to RM50. The opening of the account is mandatory to all banks that we met even before the loan is approved.
Hong Leong Bank requires a condition that the loan applicant must have a fixed line at home. But in the event of without fixed line, the person for reference mentioned in the form must have a fixed line. They even do not accept a direct line of the employer of person in reference.
Alliance Bank’s mandatory requirement is the loan applicant must be a credit card holder. If you are not a credit card holder, stay away. This condition is not mentioned anywhere in their brochures or web sites.
AmBank advertised personal loan as well but it is meant for government servants but this was not mentioned in their web sites.
CIMB Bank requires a guarantor for personal loan financing.
RHB Bank requires the salary amount to be credited in the savings account monthly.
Since my friend is not a credit card holder, he managed to apply for the loan to Hong Leong Bank by putting the name of his father as his reference. Luckily his father still maintains a fixed line in his village. Since he is not blacklisted by CTOS and a clean record of CCRIS, his application was accepted and recommended by the branch to Head Office for approval.
Two days later, the branch called for utilities bills to prove that his house is his. He has fully paid the house. My friend went and delivered the bills to the branch as requested. On the later part of the day, he received SMS from wherever that his loan application has been rejected with no reason given.
Subsequently we approached EON Bank which was quite convincing in giving the loans with no weird requirements. After a week, he received SMS again about the loan not being approved. My question is why are financial institutions rejecting loans without any reasons? They have every right to reject the loans BUT rejection without any reasons is unacceptable and it is unfair to the public.
Finally, my friend is now in a dilemma as he is now having two savings accounts which he does not need too many accounts. We were told that the accounts can only be closed after three months from the date of opening.
My observation here is the banks are actually interested in opening of accounts and the deposits. The branches are having KPIs set by Head Office to show number of accounts opened. The opening of accounts is just to facilitate their KPIs. But it has become “one man’s meat is another one man’s poison”. I wonder whether the Association of Banks in Malaysia (ABM) is aware of this misrepresentation of facts about personal loan financing by the Banks. Even if ABM is aware or is the ABM still exists, the Banks are just ignoring whatever rules and regulations imposed on them.
My conclusion is this friend of mine with stable income of RM2,500-00 with no CTOS or CCRIS, no credit cards, no more housing and car loans except for ASB loan against standing instructions, where would he look for an amount of about $8,000-00 for his house renovation and car repair costs? Can BNM help him to solve his predicament? Yes. BNM has telelink and it works.
Tuesday, May 3, 2011
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