NCBA to raid customer savings for loan repayments
NCBA to raid customer savings for loan repayments
Lender NCBA has rattled its customers with a new feature that will allow it to raid any accounts held at the bank, including savings accounts, to settle outstanding loans—removing a previous safeguard that ensured each account operated independently.
In a notice to its customers on Tuesday, the bank said that the new feature, dubbed Auto Sweep, will ensure seamless loan repayments. This feature automatically collects the amount due from the customer’s other accounts with the lender if their primary loan repayment account lacks sufficient funds on the due date.
This means that NCBA can now, without prior consent, access other funded accounts to repay loans when the designated account is not sufficiently funded.
“If your primary account does not have sufficient funds to cover your loan repayment on the due date, the auto sweep feature will automatically transfer the required amount from your alternative accounts (such as savings or other linked accounts) to your primary loan repayment account,” NCBA notice said in part.
The bank did not give its customers any options to opt out of the service, to stop the bank from accessing their savings and other accounts to repay loans.
Read also: NCBA boosts interim dividend to Sh3.7Bn amid 5% profit rise
“Please note that this process is automated, so you do not need to take any action. The transfer will occur automatically, ensuring that your loan repayments are made on time and helping you avoid any late payment fees or penalties,” the lender added.
It argued that the benefits of the auto sweep feature will ensure loan repayments are always on time, even where the customer’s primary account has insufficient funds while avoiding late repayment fees. This it said will also help avoid late payment fees and penalties ‘keeping your loan account in good standing.’
“This feature is designed to help you avoid missing loan payments, which can negatively affect your credit score and result in penalties. By automatically debiting other accounts, the bank ensures your loan remains in good standing.”
It also offers a "hassle-free way to manage your loan repayments without the need for manual transfers," NCBA noted.
