The State Bank of Pakistan on Thursday directed banks to provide an upfront key product fact sheet on credit cards. According to CPD Circular No 3 dated February 20, 2014, in order to enhance the existing level of transparency and disclosure in the credit card business, it has been decided that banks will invariably provide an upfront key product fact sheet in the form of a summary box to their prospective customers with effect from September 1, 2014.
The State Bank has also sent a specimen of the summary box to banks to be filed by the customers. The summary box containing the minimum information relating to Annualised Percentage Rate (APR), effective interest rates, minimum monthly repayments, card limits, default charges, cancellation charges, renewal fee, insurance coverage, expiry of card etc, is being attached for meticulous compliance.
Banks may, however, add any further material information in the summary box as they deem necessary, the circular said. Further, banks have been asked that before issuing any credit card, they will retain a duplicate copy of summary box duly signed by the customer and authorised banker, in line with the SBP record retention regulations. According to the circular, failure to comply with the directives shall attract penal action under the provisions of Banking Companies Ordinance, 1962.
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