Patrick Njoroge meeting KBA. PHOTO | FILE
Patrick Njoroge meeting KBA. PHOTO | FILE

According to the CBK governor Patrick Njoroge, the commercial banks were not supposed to blacklist the dormant account holders citing to be bank defaulters. He explained what it meant for being a defaulter according to the credit reference bureau report and regulations.

"A defaulter is anyone who has taken a loan and decline to pay back the loan. Monthly charges for an account are not loans to the customer but your interest. The charges are up for the bank to know what to do with it. A negative bank account due to bank charges is not defaulting and the bank should dig to know the reasons why the customer left" he said.

Banks should not blacklist customers whose dormant accounts run into negative balances, the Central Bank of Kenya (CBK) has said.

“Failure to close a bank account does not in itself amount to defaulting on a loan. However, it is important to note that credit facilities that had not been fully serviced or regularised when they became dormant may amount to non-performing loans,” said CBK in response to questions by Business Daily regarding the matter.

Customers have accused banks of blacklisting dormant account holders whose balances slip into negative figures due to standing monthly charges.

The lenders then deny the account holders access to credit, effectively lumping them in the category of loan defaulters.

CBK has asked banks to adhere to conditions stipulated in the Credit Reference Bureau (CBR) regulations.

"Bank customers should take advantage of the free credit report copy that they are entitled to each year to check any inaccuracy."CBK  Governor said.

Each citizen is entitled to a free CRB statement every year to see what can be incorrect with the banks or SACCOs. People must learn to validate their credit history as some banks may infringe their borrowing rights.

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