Thanks for bringing to our attention the piece of news published by SPH Straits Times.
So, it seems to me that according to the article:
1) MAS made empty talk and refused to take any action?
"
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."
So did MAS made any follow up to check whether Citibank take any satisfactory action after the feedback by Citibank's affected customers??? If they did, what has MAS done???
2) CASE also made empty talk and refused to take any concrete action to help?
"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.""
So now consumers unfairly bullied by Citibank, what has CASE done to help the affected consumers???
3) And Citibank's Mr Peng Chun Hsien, Citibank Singapore's head of secured finance solutions are giving "reasons" like:
a) "current revision is only applicable to clients outside the lock-in period".
b) 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."
c) 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.
d) Citibank said it undertook "careful consideration of factors including prevailing market conditions" before making the move.
To me, statement "(a)" made by Citibank's Mr Peng is IRRELEVANT because regardless of lock-in period or not, whatever changes Citibank made has to be according to the loan contract, not whether the loan is outside lock-in period or not.
To me, statement "(b)" made by Citibank's Mr Peng is ILLOGICAL since if the word 'throughout' refers to the tenure and period that the loan covers, that mean actually Citibank has no right to change the fixed spread!!!
Again, statement "(c)" made by Citibank's Mr Peng is again IRRELEVANT because it doesn't matter whether Citibank's customers had been given sufficient notice or not because FACT is, if Citibank is not abidding by its side of the contract, the whole process "SMELLS"! (and not "transparent" as claimed by Mr Peng).
Again, statement "(d)" made by Citibank's Mr Peng is again IRRELEVANT because who cares what consideration they made before they don't abide by their side of the contract???
Look at the 4 statements (a) to (d) made by Citibank's Mr Peng to justify increasing the spread % and I cannot find anything that Mr Peng points to in the loan contract to justify increasing the spread. This does seem very SMELLY SMELLY indeed!!! Seems like Citibank does not have anything in the loan contract to backup their unilateral increase of the loan spread!!!!!!!!!!!!!!
So what are the truth? These statements according to ST are the truth:
i) "
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."
None of the banks, other than Citibank, had unilaterally hiked the spread (that is is supposed to be fixed according to the loan contract)!!!!!!!!!!