CCAN irked at NBA’s high interest rates

Kathmandu, August 9:

Credit Consumers’ Association of Nepal (CCAN) today blamed Nepal Bankers’ Association (NBA) for charging high interest rate from consumers.

“NBA has a law which doesn’t support consumers in any aspect. Security is provided only to the bankers, not the consumers. They charge consumers very high interest rates,” CCAN general secretary Ganesh Giri said.

CCAN has demanded that NBA charge normal interest rates so that consumers would

be able to pay the interest on time and would not have to face hazards. “NBA charges 13-14 per cent interest on short term loans and 10-11 per cent interest on long term loans, which is quite high,” said Giri.

There are discrepancies in the rates the banks charge for drafting letters of credit or any other kind of transactions. According to Giri, “Banks charge haphazardly for different transactions. If we have to draft a letter, they charge anything between Rs 300 to Rs 500, depending upon the type of bank.”

“There is no limit to the amount the banks charge. Two or three years ago, the charge for drafting a letter was Rs 100 to Rs 150 but now as Nepal Rastra Bank doesn’t show any concern about the exploitation of consumers by the banks, the exploitation is going on,” Giri added.

The money transfer centres charge some amount in transactions from the general public as per the service charge. But according to Giri, the service charges are quite high. It is about more than six per cent of the transaction amount whereas the service charge should be only 1-1.5 per cent.

CCAN has urged the government to formulate a new policy for laws regarding protection of consumers and not only the bankers. “There is not a single word in the Consumer Protection Act 2059 about the consumers of banks. There should be a law to address the problems of

consumers in the banking sector,” said Giri.

Talking about the International Consumer Credit Association (ICCA) Missouri, USA, Giri said, “There are 40 ICCA members from all over the world of ICCA including Nepal Rastra Bank (NRB), but I think as we are the association of credit consumers we and not NRB should be the member of ICCA. We are corresponding with ICCA for membership.”

CCAN has also protested against the monopoly of the banking sector. Clarifying the act of halting work and padlocking the office at Kanchanpur on August 3-4, a CCAN release

said they had not asked not to pay the debts but had called for lower interest rates.

CCAN also said that there was no system regarding filing a case by consumers against the bank. Only bankers can file cases, which was not fair, it added.