Banks should pass on lower interest rates: Case

Source : Straits Times - 9 Jan 2009

I REFER to the letters, ‘Bank unfair to existing home loan clients’ by Mr Khor Eng Hao (Dec 31), and ‘Home loans: No interest savings despite falling market rates’ by Mr Toh Hai Joo on Monday.

The Consumers Association of Singapore (Case) agrees with Mr Khor and Mr Toh that banks should pass on the lower interest rate to consumers, especially when interbank interest rates had fallen. We strongly urge the banks to do so.

We are also of the view that banks should be more transparent and disclose how they compute the housing loan interest rate (whether called Special Mortgage Rate or otherwise) charged for their housing loans. Case has written to the Association of Banks in Singapore and the banks directly on the matter and will follow up with the authorities concerned if required.

Meanwhile, Case will continue to monitor the situation in the market, and will review feedback received, so as to raise the issue with the banks and regulatory authorities where appropriate.

We thank Mr Khor and Mr Toh for their feedback.

Seah Seng Choon
Executive Director
Consumers Association of Singapore