Regulations for Financial Institutions on Credit ChecksOverdue Debts

Ongoing Credit Checks and Requirements for Borrowers with Past Due Debts

Introduction:

highlights the regulations enforced upon financial institutions when dealing with borrowers who are 60 days past due on credit card or unsecured credit facilities.

Borrowers at Risk:

When a borrower's debt is considered 60 days past due, financial institutions FIs must adhere to strict guidelines regarding ling practices. A debt becomes overdue if:

• For credit cards and revolving unsecured credits: The minimum monthly payment has not been received by the specified due date.

• For non-revolving unsecured loans such as term loans: Any installment amount is unpd beyond its due date.

, financial institutions should verify these detls through their own records or consult with credit bureaus. It's crucial to note that the restriction on exting further unsecured credit applies only when any credit card or unsecured loan facility is overdue by 60 days.

Cross-Check Mechanism:

In order to ascertn whether a borrower owes an overdue debt to another financial institution, institutions are advised to consult with credit bureaus. This process ensures transparency and accuracy in handling such cases.

Lifting the Suspension:

Upon repayment of all minimum payments due without needing to settle the entire outstanding balance, a financial institution may reinstate the previously susped credit facilities by conducting fresh credit bureau checks alongside income assessments on the borrower's eligibility.

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These regulations are designed to manage risk effectively and mntn integrity in financial transactions. By adhering to these guidelines, financial institutions can ensure they operate within legal frameworks while safeguarding agnst potential risks associated with delinquent borrowers.

We hope provides clarity on handling borrowers with past due debts, ensuring a transparent and responsible process for all parties involved.

Government of Singapore

Monetary Authority of Singapore

: The information serves as guidance based on existing regulations. For the most accurate updates or specific legal advice, please refer to official sources from governmental bodies.
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