Citibank is unilaterally rasing the spread on its existing Sibor loan customers !

[economist]

Good one! Excessive one-sided agreements are everywhere, we need a stronger enforcement of Consumer Protection Act, and more fundamentally a more proactive consumer population.

To add to my comments below, I refer you to today's news article on what constitute 'unfair practices' in the Consumer Protection (Fair Trading) Act:

"the Consumer Protection (Fair Trading) Act states that even if the consumer had entered into a written agreement with such terms with the hotel (ignorantly or carelessly), such an agreement can be challenged in court by the consumer suing the hotel on the grounds that it is an "unfair practice".
One of the "unfair practices" specified in this Act is "taking advantage of a consumer by including in an agreement terms or conditions that are harsh, oppressive or excessively one-sided so as to be unconscionable"."





The Straits Times
www.straitstimes.comPublished on Mar 18, 2015

Recourse for consumers over 'unfair practices'


CONSUMERS do have some legal recourse over unfair practices by businesses ("Case looks into wedding banquet cancellation fees"; Monday).
Speaker of Parliament Halimah Yacob cited the case of a couple who had to pay half the cost of the wedding banquet, despite cancelling their booking a year before the wedding. This is clearly exorbitant and punitive, which is not allowed by the law.
If the hotel wants the couple to pay half of the banquet cost, it must be able to prove in court that it has suffered such actual damages (amounting to half the cost).
Since the cancellation notice was given a year in advance, it is hard to imagine how the hotel could have suffered a loss of such an amount.
Furthermore, the Consumer Protection (Fair Trading) Act states that even if the consumer had entered into a written agreement with such terms with the hotel (ignorantly or carelessly), such an agreement can be challenged in court by the consumer suing the hotel on the grounds that it is an "unfair practice".
One of the "unfair practices" specified in this Act is "taking advantage of a consumer by including in an agreement terms or conditions that are harsh, oppressive or excessively one-sided so as to be unconscionable".
Tan Sin Liang
Copyright © 2015 Singapore Press Holdings.

[amk]

we need ... and more fundamentally a more proactive consumer population.

from the zaopao report,

他说：“我们看准SIBOR是透明和公平的，银行无论如何都无法作弊。我们万万没想到的是，银行竟然可以就此改变息差。”

该名读者义愤填膺地说：“这是不道德、不公正和无法被接受的行为。”

消协认为，花旗银行若在无正当理由的情况下改变利率，对其贷款客户并不公平

these are in national papers, proactive enough ? how "proactive" do you want consumer to be ? hire a lawyer to sue the bank ?
If there is no legislation in place, or a precedent the authority takes care of such incidents, there is very little consumer can do.

[teddybear]

Your friend is really lucky! Consumer Protection (Fair Trading) Act cover financial products and services only from April 2009!
If your friend's case happen before that date, he really has no law to back him up and have recourse over the unfair treatment he received from Citibank!
Even with the law, let's wait and see who/which organization is going to help to fight for justice for your friend?
Have laws but nobody to propogate and made known and aware to other people and nobody with authority to help fight the case also no use BECAUSE the GORILLA always think that you "small fries" and individuals are NO FIGHT against them!!!!

Is it time that Singapore enact class action suit law so that people can sue a group against unfair treatment/practise/oppression (e.g. DBS' Lehman note case) etc!!!!!!!!!!!!!!


"Since 15 April 2009, the CPFTA was amended to cover financial products and services. This and other amendments were made to widen the scope of protection offered to consumers and facilitate a fairer trading environment for both consumers and businesses. The legislation protects consumers, without adding onerous burden to businesses and costs. "

from the zaopao report,






these are in national papers, proactive enough ? how "proactive" do you want consumer to be ? hire a lawyer to sue the bank ?
If there is no legislation in place, or a precedent the authority takes care of such incidents, there is very little consumer can do.

[hopeful]

that's where human behaviour comes in.
Let me calculate:
They come up with money, and I dont put any money (i am free rider).
1) if they win, i also win
2) if they lose (everybody loses against the banks), status quo for me.

Hence,
I also strongly encourage the person(s) to come up with the money to sue Citibank for the benefit of us all, me and Teddy included

[teddybear]

Translations (pardon me if translation not well done):

" 他说：“我们看准SIBOR是透明和公平的，银行无论如何都无法作弊。我们万万没想到的是，银行竟然可以就此改变息差。”

该名读者义愤填膺地说：“这是不道德、不公正和无法被接受的行为。”


He said: "We spotted SIBOR is transparent and fair, and the bank can not cheat in any case. We never thought that this bank would change the interest rate differential unilaterally."

The reader angrily said: "It is immoral, unjust and is unacceptable behaviour."


" 消协认为，花旗银行若在无正当理由的情况下改变利率，对其贷款客户并不公平"

Consumers Association of Singapore CASE believes that Citibank's changes in interest rates in the case of its loan without valid reason is unwarranted and is not fair to its clients.

from the zaopao report,

他说：“我们看准SIBOR是透明和公平的，银行无论如何都无法作弊。我们万万没想到的是，银行竟然可以就此改变息差。”

该名读者义愤填膺地说：“这是不道德、不公正和无法被接受的行为。”

消协认为，花旗银行若在无正当理由的情况下改变利率，对其贷款客户并不公平

these are in national papers, proactive enough ? how "proactive" do you want consumer to be ? hire a lawyer to sue the bank ?
If there is no legislation in place, or a precedent the authority takes care of such incidents, there is very little consumer can do.

[teddybear]

Sue Citibank?

How much money you have? They have inhouse lawyers right? Do you have? Citibank do not need to spend additional CENT to take on your law suit using their inhouse lawyers whose salary are already paid (regarding of whether you bring law suit against them or not right)? No wonder they have no qualm about doing thing that is unjust and unfair to small fries like us?

that's where human behaviour comes in.
Let me calculate:
They come up with money, and I dont put any money (i am free rider).
1) if they win, i also win
2) if they lose (everybody loses against the banks), status quo for me.

Hence,
I also strongly encourage the person(s) to come up with the money to sue Citibank for the benefit of us all, me and Teddy included

[henryhk]

Aiyo, if banks anyhow change , we as consumers will going do one thing, change bank lor , Singapore so many banks !

[teddybear]

Since 1 bank can do that,
soon every banks also do the same?
After that, which one can you then change to that you expect to treat you fairly and honour their side of the agreed and signed contract?

Aiyo, if banks anyhow change , we as consumers will going do one thing, change bank lor , Singapore so many banks !

[hopeful]

Sue Citibank?

How much money you have? They have inhouse lawyers right? Do you have? Citibank do not need to spend additional CENT to take on your law suit using their inhouse lawyers whose salary are already paid (regarding of whether you bring law suit against them or not right)? No wonder they have no qualm about doing thing that is unjust and unfair to small fries like us?

I am just a freeloader what, i dont make noise about injustice. wayearlier, i have already said i accepted big fish eat small fish. that's life and no point getting angry.
unfortunately, certain forummers claimmed it is immoral and unjust, take action etc, etc.
WHen it comes to vocal support, some people are very loud.
when ask them to come out with money, the very same people keep quiet and ask "how much money you have".

[Sandiwara]

Sue Citibank?

How much money you have? They have inhouse lawyers right? Do you have? Citibank do not need to spend additional CENT to take on your law suit using their inhouse lawyers whose salary are already paid (regarding of whether you bring law suit against them or not right)? No wonder they have no qualm about doing thing that is unjust and unfair to small fries like us?

No need to sue just put on Facebook the actual fact and distributed the news around the wold

[teddybear]

Isn't that what we are doing now? Spread the news on internet, on Facebook, everywhere! Raise the awareness!

Let the relevant authority and organizations (like MAS and CASE etc), if they are responsible people, to deal with them! Let them show us that they really care about their citizens and are willing to go all out to help their citizens who are subjected to unfair and unjust treatments!

If they don't, then come General Election time, SINGAPOREANS SHOULD SHOW THEM THEIR CITIZEN POWER (either APPRECIATION or the OPPOSITE - their choice!)!!!!!!!!!!!!!

No need to sue just put on Facebook the actual fact and distributed the news around the wold

[Sandiwara]

I just post it to my Facebook. I hope this will not give to much traffic to this site

[teddybear]

GREAT!

I just post it to my Facebook. I hope this will not give to much traffic to this site

[hopeful]

i have been keeping track of this since issue started.
everyday googling "citibank singapore" and looking at 10 pages worth of results doesnt show anything remotely about citibank raising rates.

from the 5 stages of grief,
Denial
Anger
Bargaining
Depression
Acceptance
does people have now passed to acceptance stage? that banks can change the T&C whenever they like?

[amk]

The story was published in Straits Times last Saturday. I cannot get the link. Maybe you can find it.

In it, the Citi "Head of Secured Lending" explained what "throughout" means: "it means it covers the whole term of the loan", in another words, (he didn't say), it does NOT mean it will remain unchanged. What a disingenuous answer ! Had this been a parliament debate and he said such thing in front of the ppl, he would have been ridiculed to death.

My friend is still fighting with them. However MAS is not helping. I do not think "people" accepted this. I think "people" did not generate enough buzz. No active online coverage of this matter, and not many people actively helping the cause. The affected ppl are not that many, and not all of them are active online, hardwarezone type of folks.

[teddybear]

Seems like I am right to say that our Singapore MAS is not pro-active in protecting Singapore consumers' interest, unlike HK equivalent MAS, look at Lehman Note case and now again?????

that Citibank Head says "throughout" means "covers the whole term of loan", doesn't it means that the figure cannot be changed? what talking him???? If "0.65% throughout" can be changed to other value, then why put "throughout"??????

CASE, not doing anything?
Isn't CASE just recently fighting the hotels on unfair treatment for cancellation of wedding packages with hotels?
This mortgage loan issue affects even more Singaporeans and they are not going to be pro-active to help? Don't they think they are short-sighted? Weddings is just a person's ONCE in a life-time event, but mortgages >80% of Singaporeans will have, more or less!

So we have:
MAS - Not going to do anything! (as far as we can know now and they have been consulted for the news article).
CASE - Not going to do anything (as far as we know now since they have been consulted for the news article).
financial dispute resolution centre - ???

The story was published in Straits Times last Saturday. I cannot get the link. Maybe you can find it.

In it, the Citi "Head of Secured Lending" explained what "throughout" means: "it means it covers the whole term of the loan", in another words, (he didn't say), it does NOT mean it will remain unchanged. What a disingenuous answer ! Had this been a parliament debate and he said such thing in front of the ppl, he would have been ridiculed to death.

My friend is still fighting with them. However MAS is not helping. I do not think "people" accepted this. I think "people" did not generate enough buzz. No active online coverage of this matter, and not many people actively helping the cause. The affected ppl are not that many, and not all of them are active online, hardwarezone type of folks.

[teddybear]

Here is the article published in Straits Times:

In summary, the news article tells us that:

1) Citibank UNILATERALLY hike the spread for their SIBOR loan (e.g. loan with interest term being "SIBOR + 0.60%) from 0.60% to 0.85%.

2) Citibank insisted that they have the right to change the spread, despite the complaint of unfair treatment by Citibank and query by the journalist.
Citibank Head's definition of "0.65% throughout" in mortgage loan agreement definitely is NOT WHAT WE UNDERSTAND. May be he can show us his dictionary's definition?

3) Consumers Association of Singapore (CASE) asked Citibank to "justify such rate changes clearly to the affected consumers".
My understanding: CASE asked Citibank to "justify" to pacify their customers can already (and CASE NOT GOING TO DO ANYTHING MORE......)

4) Monetary Authority of Singapore (MAS) said "it does not regulate the setting of interest rates but the banks must provide clear and relevant information on products and services, said a spokesman, adding that MAS has asked Citibank to review the customer feedback received".
My understanding: MAS asked that Citibank to review customer feedback received (can already, MAS NOT GOING TO DO ANYTHING MORE......)

Borrowers upset over hike in margin for Sibor loans

Monday, Mar 30, 2015
Rachel Boon
The Straits Times

MANY home buyers with loans pegged to the Singapore Interbank Offered Rate (Sibor) have been hit with higher repayments following the Sibor's increase this year.

That is to be expected, but some Citibank customers have also found that the margin or spread - the added percentage banks tack on to the Sibor - has also moved up.

They were informed earlier this month that the spread on their Sibor-pegged loans would increase to 0.85 per cent from the promotional rate they had signed up with. The change takes effect from April 1.

Citibank said the spreads range from 0.6 to 0.8 per cent for customers who took up loans in late 2010 and in 2011.

One customer said he has been on a three-month Sibor loan since 2011 under a two-year lock-in package. His spread has risen from 0.7 per cent to 0.85 per cent.

However, Citibank said raising the spread has affected only a small number of people.

Mr Peng Chun Hsien, Citibank Singapore's head of secured finance solutions, also stressed that the "current revision is only applicable to clients outside the lock-in period".

Another customer, a Mr Lee, said he has been on a one-month Sibor home loan since 2011.

He told The Straits Times his spread has risen from 0.65 to 0.85 per cent but he had thought the spread would stay at 0.65 per cent throughout the loan.

Mr Peng told The Straits Times: "The word 'throughout' is a term the industry uses, and refers to the tenure and period that we are covering."

He added that affected customers had been given sufficient notice so that the process is transparent and they can opt to refinance their loans. Mr Peng noted that the overall rate is still fairly competitive.

Mr Keff Hui, a broker at Mortgage Supermart Singapore, noted that an 0.85 per cent spread used to be the market rate but some banks had lowered it to attract customers.

Another client on a one-month Sibor said: "Sibor is already variable and has gone up by 100 per cent year on year. "How can the spread be variable too?"

Finance industry experts say reviewing spreads is standard bank practice, but in practice, changing the spread during the loan period is uncommon.

The Straits Times understands that banks such as United Overseas Bank and OCBC Bank have not increased the spreads. A DBS Bank spokesman said DBS and POSB have not varied spreads while under an existing agreement with customers. He said an 0.85 per cent spread used to be the market rate but some banks have lowered it to attract customers.

Customer Mr Lee said: "I will have to pay $200 to $300 more a month, but the amount is not significant. It's about how the bank can do this to customers."

Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, said: "We are of the view that the banks should justify such rate changes clearly to the affected consumers. Such changes will not be fair to consumers if there is no justification to do so."

Citibank said it undertook "careful consideration of factors including prevailing market conditions" before making the move.

The Monetary Authority of Singapore (MAS) said it does not regulate the setting of interest rates but the banks must provide clear and relevant information on products and services, said a spokesman, adding that MAS has asked Citibank to review the customer feedback received.

Mr Peng said all the terms and conditions have been carefully outlined and that interest-rate definitions are clearly stated.

He encouraged affected customers to contact the bank, adding that any decision they make regarding their loans will not be bound by any penalty or fees.

The story was published in Straits Times last Saturday. I cannot get the link. Maybe you can find it.

In it, the Citi "Head of Secured Lending" explained what "throughout" means: "it means it covers the whole term of the loan", in another words, (he didn't say), it does NOT mean it will remain unchanged. What a disingenuous answer ! Had this been a parliament debate and he said such thing in front of the ppl, he would have been ridiculed to death.

My friend is still fighting with them. However MAS is not helping. I do not think "people" accepted this. I think "people" did not generate enough buzz. No active online coverage of this matter, and not many people actively helping the cause. The affected ppl are not that many, and not all of them are active online, hardwarezone type of folks.

[hopeful]

thanks teddy and amk for the article.

but i am suprised that although the article was Mar 30, 2015. googling "citibank singapore" and limit the search to the past 24 hours dont even show the ST article.
Looks like citibank has a rather active news generator. it simply generates newer and newer articles until whatever negative stuff is push down the chain.
So unless a googler already has the intention to look up about the case and use very specific keywords, the casual searcher won't know such things or even those comparing mortgages will not find about it.

And one more interesting stuff: Not sure whether these finance industry experts really know or are just hedging their words.
Finance industry experts say reviewing spreads is standard bank practice, but in practice, changing the spread during the loan period is uncommon.
Perhaps I read too much, but "uncommon" seems to imply that it has happened a few times before.

[amk]

thanks teddybear for the news article (does it need a paid subscription ?)

Mr Peng told The Straits Times: "The word 'throughout' is a term the industry uses, and refers to the tenure and period that we are covering."

this statement is so incredible that it needs higher degree of cynicism to comprehend (hopeful I bet you are not able to come out with this explanation ). I sent the reporter an email asking her whether she can ask Mr Peng to further explain what these 2 words together "spread throughout" mean, not just the word "throughout".

Finance industry experts say reviewing spreads is standard bank practice, but in practice, changing the spread during the loan period is uncommon.

Previous Chinese article said no other bank has ever done this. In fact this statement is self contradictory: if it were "standard practice", why doing it is "uncommon" ?

[icarus777]

Hi,

I have a Citibank Loan which have yet to be disbursed. Should I be concern about Citibank's actions now?

[hopeful]

thanks teddybear for the news article (does it need a paid subscription ?)
this statement is so incredible that it needs higher degree of cynicism to comprehend (hopeful I bet you are not able to come out with this explanation ). I sent the reporter an email asking her whether she can ask Mr Peng to further explain what these 2 words together "spread throughout" mean, not just the word "throughout".

Previous Chinese article said no other bank has ever done this. In fact this statement is self contradictory: if it were "standard practice", why doing it is "uncommon" ?

yup, i also cannot understand. But i also knows that since I am not in the finance industry, the parlance used in finance industry maybe different from everyday use of the language.
like for example, difference between "capital protected" and "capital guaranteed". To layman, these 2 phrase means the same thing, but in finance industry parlance, these 2 phrases have entirely different meanings.
another recent example is "overcharging" and "overbilling".

I also kena burned by minibonds. That's my expensive lesson to start reading the fine print and leave ego/pride at the door. mine money is at stake. if i look stupid asking stupid questions, so be it. I would assume correctly that most people dont ask stupid questions because they dont want to look stupid in front of bankers. so if those bankers meet a person who ask stupid questions, that may be hopeful.
My advice once again is: people spend years to collect the hundred of thousands of dollars to pay downpayment, why not spend a few more hours/days to read the fine print before spending that years of work?

as for the industry practice, review spread is standard practice, which does not necessarily lead to changing spread.
it is the changing of spread that is not standard practice, ie uncommon.

[hopeful]

Hi,

I have a Citibank Loan which have yet to be disbursed. Should I be concern about Citibank's actions now?

citibank have used their ace card so early in the year, you will be safe from further revisions for this year. it is the other banks you have to worry about.

[bargain hunter]

they won't touch u until your lock in period is up. BEWARE when its close to that time!

Hi,

I have a Citibank Loan which have yet to be disbursed. Should I be concern about Citibank's actions now?

[hopeful]

i think this explanation of throughout is better than mr peng's.

From the article and experience, i gathered that the terms are separate:
tenure: 30 years
rate: SIBOR + 0.65% spread throughout.
lock-in period: 2 years

so throughout is it defined or un-defined in the loan document? or do we assume the definition? perhaps citibank intepret it as throughout the 2 year lock in period. (and we didnt clarify before hand and assume that it is throughout the 30 years.)
so in this case, "throughout" means the lock-in period and not the entire 30 years.
So SIBOR + 0.65% fixed spread through out means spread 0.65% is fixed within the lock-in period, once outside the lock-in period, it is adjustable.

perhaps next time, when we see throughout, have to ask definition of throughout
or put in handwriting (in red) next to the terms: rate: SIBOR + 0.65% spread throughout the 30 year mortgage.

[amk]

or put in handwriting (in red) next to the terms: rate: SIBOR + 0.65% spread throughout the 30 year mortgage.

no what, Citi can always say somewhere, (and it does say), "all rates are subjected to change" what.
so whatever x yr spread throughout whatever is pointless.

bottom line seems to be, banks are pricing the loan for the lockin period anyway. any rate/spread after that, is not "guaranteed". This means all those throughout spread/rate deals are in danger. Ppl today pay for a higher throughout spread/rate thinking doing it just once and for all. They will be feel even more shortchanged. In 2011 time Citi throughout rate was as low as "normal" 3Y rate, which was rather unusual at that time. (now it's clear: Citi never intended to stick to that anyway. just a sales gimmick.)

[hopeful]

i think from the way mr peng is saying, citibank does not want to point out this clause to the public. (but i think once citibank has no choice, he will say this clause exist, and he will also point out that all other banks have this clause.)
you see english news article did not report on the existence of this clause at all in the bank(s) T&C. i dont know abt the chinese article.
are the reporters aware? are the finance industry experts aware? is MAS aware? is CASE aware?
yet why no mention of the clause at all? That is the question.
or as sherlock holmes say"the dog did not bark".

so now he is trying to play on the word "throughout", which is so far thus un-defined. you all can checked whether the definition of "throughout" exist in your loan documents.

[teddybear]

Banks do not exist to do charity lah!
If the term is present, and it is fair, and they can increase their profits, why no bank does it except Citibank now being the first 1????

"review spread is standard practice, which does not necessarily lead to changing spread. it is the changing of spread that is not standard practice, ie uncommon."
- Actually, they do change spread, BUT BUT only for new mortgage loan contracts, not those that BANKS already signed and there is no term in the mortgage loan contract that says they can change the spread!!!!!!!!!!

It is clear to me from you example, say e.g. "3M_SIBOR + 0.60% throughout"
means 0.60% forever for the tenure of the loan, as long as you are still the bank mortgage loan customer and that mortgage loan agreement is still intact (i.e. you have not refinance)!

Hope the journalist will follow up with Citibank's Mr Peng to clarify all the questions we raised here!

yup, i also cannot understand. But i also knows that since I am not in the finance industry, the parlance used in finance industry maybe different from everyday use of the language.
like for example, difference between "capital protected" and "capital guaranteed". To layman, these 2 phrase means the same thing, but in finance industry parlance, these 2 phrases have entirely different meanings.
another recent example is "overcharging" and "overbilling".

I also kena burned by minibonds. That's my expensive lesson to start reading the fine print and leave ego/pride at the door. mine money is at stake. if i look stupid asking stupid questions, so be it. I would assume correctly that most people dont ask stupid questions because they dont want to look stupid in front of bankers. so if those bankers meet a person who ask stupid questions, that may be hopeful.
My advice once again is: people spend years to collect the hundred of thousands of dollars to pay downpayment, why not spend a few more hours/days to read the fine print before spending that years of work?

as for the industry practice, review spread is standard practice, which does not necessarily lead to changing spread.
it is the changing of spread that is not standard practice, ie uncommon.

[teddybear]

Letter published in Today Voices (see URL and below):


Now we have more information. It appears that the bank is giving excuses, like:
"adjusting to market trends and that the small print in the contract allows for this."

It appears that the bank in question may have pushed to secure more of such loans at that time with seemingly attractive terms BUT with no intention to keep to their side of the agreement (and to honour their attractive terms) and they believed that they "small print in the contract" could allow them to do this?

Why is Consumer Association of Singapore (CASE) NOT DOING ANYTHING about such unfair contract to the consumers that is contravening the CPFTA (Consumers Protection and Fair Trade Act)?

Nothing to stop bank from raising loan margins?

In June 2010, I took a mortgage that was marketed and signed as having the Singapore interbank offered rate (Sibor) plus 0.65 per cent as the interest rate throughout the loan tenure.

FROM OH ENG LEE - MARCH 31

In June 2010, I took a mortgage that was marketed and signed as having the Singapore interbank offered rate (Sibor) plus 0.65 per cent as the interest rate throughout the loan tenure.

This month, I received a letter stating that Citibank is revising the rate to Sibor plus 0.85 per cent.

When I called the bank, I was told only that it is adjusting to market trends and that the small print in the contract allows for this.

So, the bank has invoked the clause without any good reasons other than it can legally do so. What would stop it then from raising the spread to 1 or even 1.5 per cent next year just because it could?

The Monetary Authority of Singapore or the Consumers Association of Singapore should do something, as this is unfair to consumers.

[teddybear]

Another Letter published in Today Voices (see URL and below):

Now, the below letter didn't say why that bank in question has the right to adjust the spread.
The statement "“Interest rates are all subject to review and may be adjusted from time to time depending on prevailing market conditions." we would just interpret it as changes to the SIBOR rate and nothing else. In no where did their mortgage loan agreement says that they can change the "spread" value right?

So, can Monetary Authority of Singapore (MAS) please answer the question:
"The question for the Monetary Authority of Singapore is whether banks are allowed to adjust their margin at their total discretion?."
(when there is no such term clearly spelled out in the mortgage loan main contract)

Should banks be allowed to adjust rates at their discretion?

I took up a mortgage in 2011, with the effective interest rate being the one-month Singapore Interbank Offered Rate (SIBOR) plus 0.68 per cent for the first year and thereafter, as well as a minimum interest rate of 0.8 per cent.

FROM NG EE LAINE - APRIL 1

I took up a mortgage in 2011, with the effective interest rate being the one-month Singapore Interbank Offered Rate (SIBOR) plus 0.68 per cent for the first year and thereafter, as well as a minimum interest rate of 0.8 per cent.

The bank’s facility letter also stated: “Interest rates are all subject to review and may be adjusted from time to time depending on prevailing market conditions. The bank will not be giving advance notice to the borrower for any changes.”

Now, I have been informed that my mortgage interest rate “will be revised to one-month SIBOR plus 0.85 per cent” after March 31.

While I understand that my mortgage interest rate would be subject to SIBOR changes, this move by the bank seems contrary to the agreement in the facility letter.

The question for the Monetary Authority of Singapore is whether banks are allowed to adjust their margin at their total discretion.

Also, can such a clause as “the bank will not be giving advance notice to the borrower for any changes” in the interest rate be legally imposed by a financial institution?

[teddybear]

3rd Letter on the same bank (is it Citibank?) published in Today Voices (see URL and below):

In response to below letter writer's question:
Borrowers with such SIBOR packages have no recourse and are at the mercy of the bank, making a mockery of a “fixed spread” agreement. Would the Consumers Association of Singapore or any relevant authorities comment on such an unfair practice?

Sorry to tell the below letter writer that as of NOW (that we know so far),
MAS (Monetary Authority of Singapore) is NOT GOING TO DO ANYTHING!
CASE (Consumers Association of Singapore) is NOT GOING TO DO ANYTHING!

You Singaporeans have to go fight with the 800-pound GORILLA bank (who has all the lawyers at their beak and call)!!!!!!!!!!!!!!!!! You have enough money to sue the bank and win them????
Seems like a case of big bully at work????
Are all the letters referring to the same bank - Citibank?

So far, from other news articles, only Citibank had been mentioned as the BANK TO ADJUST THE SIBOR LOAN SPREAD!

Banks profiteering from uptrend in SIBOR

A few years ago, I took up a mortgage package pegged to the Singapore Interbank Offered Rate (SIBOR), at a spread of 0.6 per cent plus SIBOR.

FROM KELVIN LEE JIE - APRIL 1

A few years ago, I took up a mortgage package pegged to the Singapore Interbank Offered Rate (SIBOR), at a spread of 0.6 per cent plus SIBOR.

The interest rate has just been revised to 0.85 per cent plus SIBOR, with no explanation provided.

Though the bank reserves the right to review the interest rate from time to time and adjust it accordingly, to raise the spread by more than 40 per cent overnight is outrageous.

As the mortgage rate is SIBOR-pegged, the rising cost of funds is already passed on to borrowers, with the bank making a profit in the spread. (“Home owners hit as Sibor rises to highest in seven years”; March 13) This is profiteering from the current uptrend in SIBOR, similar to the petroleum companies recently raising pump prices by more than the increase in petrol duties.

Borrowers with such SIBOR packages have no recourse and are at the mercy of the bank, making a mockery of a “fixed spread” agreement. Would the Consumers Association of Singapore or any relevant authorities comment on such an unfair practice?