BIBD has created a new financial strategy product specially designed to assist customers in achieving financial comfort, settle their outstanding credit card obligations and become debt free.
Dubbed as ‘BIBD Credit Card Programme’, it will serve as a consolidation facility over a pre-agreed term and will systematically reduce the customer’s existing credit card debt to zero.
The BIBD Credit Card Programme offers a one-solution for customers’ financial needs in which the benefits include a low interest rate of 5.75 annual percentage rate, no processing fee and free Takaful cover.
This programme will be officially launched today and is available to existing BIBD customers as well as members of the public for three months starting from the launching date. To qualify for it, customers must assign their salary to BIBD.
As an additional benefit, qualifying customers of the programme will be eligible for a BIBD credit card with a credit limit based on the guidelines issued by the Financial Institution Division at the Ministry of Finance.
During a press conference with the media, the panel comprising Mr Javed Ahmad, Acting Managing Director of BIBD, Haji Rozaiman bin DSLJ Hj Abd Rahman, Head of Consumer Division, Hajah Nurul Akmar Haji Jaafar, Head of Sales and Distribution Channel and Dona Eldayana Johan, Head of Product Management and Marketing solutions, briefed them on the new BIBD Credit Card programme.
Mr Javed Ahmad spoke about the facility and stressed on the fact that the BIBD Credit Card Programme is designed through the support of their existing customers.
“We listen to what the customers have to say and take their concerns into account. We have asked permission from the regulators to consolidate the multiple card debts should the customers have any outstanding debt. The multiple credit cards will merge into one single financing and converted into personal loan instead.
He went on to provide an example of the application process. “For example, if a customer has three credit cards, all the existing debts will consolidate into one and they have over three years or 36 months to reduce their debt into zero through monthly payment financing.”
“Thus, the objective of this programme is to discipline customers to pay monthly until they become debt-free. With the 5.75 Annual Percentage Rate (APR), everyone is going to benefit from the low interest rate.”
Hajah Nurul Akmar highlighted the bank’s commitment in helping customers to settle their debts, “We want the public to really understand what is in for them and at the same time, raise awareness that the misuse of credit cards is a major issue. We don’t want our customers to get swayed with debt and also, the temptations from other banks are just to mislead them.
“We want to prove to customers how we, as a syariah compliant bank, is committed to solving the problem. Therefore, we created this BIBD Care Programme product where there will be no processing fees charged and free Takaful cover will be provided. All their debts will be repaid within a maximum of 36 months or three years. They will also obtain a single BIBD credit card, as required by the Ministry of Finance.”
However, Mr Javed clearly expressed how the product might not be lucrative to the bank but also emphasised on BIBD’s commitment and priority to settle customer’s problems first and develop a long-term relationship as partners.
“We are aware that in the process, the bank might not make money but we want to rise to the challenge and help the Brunei market, develop a long-term relationship with customers, transact while helping them find solutions to their current predicament.”
“Thus, in order to facilitate debt-free customers, we have to reduce rates available on the market and hence, came up with the 5.75 APR.”
Mr Javed further stressed on the importance of truthfulness upon dealing with customers. “What infuriates us is that certain banks use all sorts of gimmicks such as flat rates. We have to be transparent to our customers. They have the right to know how much they are being charged.”
Asked on how BIBD will tackle the competitions with other banks, Mr Javed said, “There is tremendous room for improvement, focusing in terms of making sure we address the immediate needs of customers to further improve our credit card services. This product was designed with the customer in mind. There is no gimmick whatsoever. We can’t force customers to come, however, we have a large population that is intelligent and they know a good deal when they see one. We will hopefully get a decent number of customers in this new programme.”
Mr Javed Ahmad also spoke about the current situation of implementing the one credit card policy in Brunei Darussalam and tackling the credit card debt problem.
“We have 150,000 BIBD cardholders. It is estimated that an average customer owes at least $2,000 in credit card debt. So it is safe to assume that most credit card customers do have a large amount of credit card debt. If they don’t have a fixed deposit or settle their financing, that will be a huge amount of cost they have to pay.”
He further added, “One of the key issues for those in debt is that they utilise multiple credit cards from various banks as a source of financing. Credit card is mostly for payment mechanism. If those debts are not managed properly, it can get out of control and accumulate high interest rates. A typical interest throughout the Brunei market is 25 per cent. Most of them charge two per cent per month.
“It is important that you pay multiple cards on time, a missed payment can be charged with penalties that are quite substantial. Some banks even increase the interest rates. Even the new legislation in US is designed to limit the interest rates. In Brunei, the Ministry of Finance is trying to manage one’s spending habit.”
He concluded by giving a word of advice, “By the end of the month, you can pay the entire amount in full, which is the best option while taking advantage of the banking system. No interest will be charged and customers can gain free credit for a month or two. Thus, the more you borrow and the less you pay monthly installments, the more interest rates in large percentages will be charged.”
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