Fees and charges not disclosed to borrowers will be null and void - BoG to banks

The Bank of Ghana has reminded banks and all financial institutions of their requirement to disclose all charges and fees to a borrower in a loan agreement.

According to the central bank, failure to disclose such information to the borrower will result in the undisclosed charges and fees being null and void.

In its Financial Literacy on Responsible Borrowing, the central bank told borrowers to pay particular attention to the interest rate quoted

“In considering a loan offer, pay particular attention to the interest rate quoted. Look out for the Annual Percentage Rate (APR), which represents the total cost, including interest on an annual basis and fees and charges to be paid to the lender each year for the loan,” it noted.

The central bank further advised the public to always compare the APR of financial institutions in order to decide where to apply for your loan.

“Take note of all the fees and charges associated with loans, including upfront charges. Your financial service provider is required to fully disclose all fees and charges on the loan to you in the Loan Agreement.

“Fees and charges that are not disclosed to the borrower in the loan agreement will be considered null and void. The lender would be required to refund all such fees and charges already paid by the borrower and will be liable for sanctioning by the Bank of Ghana,” the Bank of Ghana explained.

SP/MA

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