CBB Volume 1: Contents

Central Bank of Bahrain Volume 1—Conventional Banks
Part A
Business Standards
BC Business and Market Conduct
BC-4 Customer Account Services and Charges
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Location: Central Bank of Bahrain Volume 1—Conventional Banks > Part A > Business Standards > BC Business and Market Conduct > BC-4 Customer Account Services and Charges > BC-4.3 Disclosure of Charges by Retail Banks > Additional Public Disclosure for Instalment Financing Facilities > BC-4.3.10
  • Additional Public Disclosure for Instalment Financing Facilities

    • BC-4.3.10

      In addition to the requirements under Paragraph BC-4.3.9, retail banks must publicly disclose by conspicuous noticeG for instalment financing facilities:

      (a) The current Annual Percentage Rate (APR) as calculated using the APR methodology in Paragraph BC-4.3.31. The APR displayed must be calculated based on the following scenarios. In case of consumer finance, amount borrowed is BD10,000 for a 7-year term and for housing facilities, BD100,000 for 25 years.
      (b) The Annual Percentage Rate (APR), must be broken down as follows:
      (i) The annual nominal interest rate payable on the instalment financing;
      (ii) Administration/handling fees;
      (iii) In the case of finance lease contracts/ijara or deferred purchase contracts, any fees for purchasing the asset; and
      (iv) Any other mandatory charges (contingent costs are excluded); and
      (c) The terms and conditions for early repayment, partial or full, of the credit agreement, or for any change in the terms and covenants of the credit agreement, as well as any relevant charges (where permitted) and the way in which these are calculated.
      Added: October 2012

    • BC-4.3.11

      The APR is a standard measure that allows customers to compare total charges for instalment financing facilities on a like-for-like basis. The APR allows the customer to compare the total charge for credit over differing periods (e.g. – two versus three years) or offered by different retail banks with differing payment profiles and taking into account the payment of any other fees payable as a condition of the contract, such as administration fees or insurance premiums.

      Added: October 2012

    • BC-4.3.12

      Any advertising through any media means of instalment financing facilities, offered by the retail banks must specify only the APR (including all fees and charges) and no other rates, i.e. nominal, base, flat or rates by any other names.

      Added: October 2012

    • BC-4.3.13

      For the purposes of Paragraph BC-4.3.10, the disclosures can be provided as one APR or a range of APRs for retail banks that provide instalment financing to different segments and products. A retail bank may have different customer segments with different risk profiles, for whom the APR offered on the same product may vary. However, the disclosures must comply with the scenarios outlined in Subparagraph BC-4.3.10(a).

      Added: October 2012

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