Not for love of money, but of Humanity. "Greater is he who works for the good of all, then he who works for the good of himself only" ~ Matthew 25:40: "The King will reply, 'I tell you the truth, whatever you did for one of the least of these brothers of mine, you did for me.'"- (NIV). I live in Singapore where the Emperor must not be disturbed.

Saturday, October 1, 2011

Banks should be careful when granting credit to these greedy old Seniors.

I refer to 'MAS rule unfair to seniors' [ST, 24Sept2011] (annexed bottom).
 Firstly, it can be inferred that Mr Koh DOES NOT hold an existing credit card account with Maybank, which is what prevents Maybank from granting him unsecured credit on a credit card. Secondly, how can Mr Koh expect Maybank to grant him unsecured credit when he himself is unwilling to collateralize his "substantial unencumbered fixed deposits (FD)" to cover for whatever credit limit that he so demands.  Nobody is stopping Mr Koh from using a credit card in so far as he is willing to collateralize an amount equal to the credit limit of the credit card account; or else a debit card [wiki] without any need for collateral at all.

Whilst Mr Koh introduces himself as a "59-year-old retiree who held a senior position in a bank" the inherent and unjustified risk that the bank takes in providing debtors with unsecured credit seems to elude him.

If banks were expected to provide seniors with unsecured credit then what is to prevent Seniors, the likes of Mr Koh to go 'bank shopping' demanding cheap and easy credit from banks all over Singapore for suspect reasons known only to himself.

Doesn't Mr Koh sense the danger of his proposition? How is the bank to retrieve its dues upon the illness or demise of Mr Koh whose life expectancy remains another great unknown. Will his decedents/ estate administrators volunteer to settle his dues or should the bank be expected to seek in protracted legal recourse to recover such dues; or worse write off such dues as bad debts only to seek a later bail out through the use of government funds?

As a senior bank officer, Mr Koh's ought to understand that this irresponsible and arrogant demands by Seniors that he advocates poses to the bank an immense credit risk as none of his investments, with the exception of collateralized FD accounts is guaranteed in the midst of a volatile economy. Could Mr Koh become bankrupt by the casino?

As a matured and respectable Senior, hasn't Mr Koh already earned enough in his lifetime, and given his "substantial unencumbered fixed deposits" in the bank, why isn't Mr Koh willing to collateralize even a small proportion of it to reassure the bank that his application for the credit card and its associated credit limit is a bonafide one?

Or is the monies in the fixed deposit account only temporary and could Mr Koh be running a scam?

Banks who wish to operate secure and sustainable business, ought be weary of the smooth words of these sly old retirees/ civil servants from "senior positions", the likes of Mr Koh whose actions betray their willingness to 'put their money where their mouth is' [def.]

They could even be 'sub-prime' debtors for all we know.

At his age, Mr Koh should spend what he owns and not abuse the banking system for more cheap and easy credit. A debit card or secured credit card is the most suitable option for use by Mr Koh.

- e.g. 'Maybankard Visa Debit' [Maybank]
- e.g. 'HSBC Secured Visa Credit Card' : [link]

The Straits Times; Published on Sep 24, 2011
MAS rule unfair to seniors

RECENTLY I complained to Maybank after it declined my credit card application, which requires a minimum qualifying income of $30,000, and copied my complaint to the Monetary Authority of Singapore (MAS).
While I had substantial unencumbered fixed deposits in that bank, they wanted me to collateralise my credit card limit, which I declined.
I am a 59-year-old retiree who held a senior position in a bank before I retired. I am debt-free, I have no bad credit record, and I own a few properties which are free of encumbrances. Despite the above, I cannot qualify for a credit card simply because MAS requires a minimum qualifying income.
My income tax returns show that I have been paying income tax regularly and without fail.
My regular 'income' is no longer derived from a salary, but from rental income, dividends, interest income, capital gains from share investments, director's fees and so on.
Yet all these do not qualify as eligible 'qualifying' income to the bank and MAS. Those who can voluntarily retire at age 62 or earlier are mostly financially independent, prudent and conservative in managing their personal finances over time.
Such retirees are excellent credit risk for banks, so why are banks and MAS not customising their risk profiling of these older people differently, instead of applying the traditional debt servicing criteria?
They are losing a golden opportunity to expand business to this growing group of well-heeled retirees who may not be super-rich, but are considering investments, spending money travelling, buying expensive goods, cars and so on. My problem is not unique.
Lending banks could get a personal net-worth statement from me, do a historical credit profiling of my person, and check with a local credit agency on my credit history, for instance, to support my wish for a credit card or other credit facilities.
It is time for the banks and MAS to think outside the box if they believe that ours is a progressive and international financial centre.
Raymond Koh Bock Swi

At/ related:
01Oct2011: Banks should be careful when granting credit to these greedy old Singaporeans.
01Oct2011: Banks should be careful when granting credit to these greedy old Singaporeans.
01Oct2011: Banks should be careful when granting credit to these greedy old Singaporeans.
02Oct2011: Banks should be careful when granting credit to these demanding and greedy Seniors.
02Oct2011: Banks should be careful when granting credit to these greedy
02Oct2011: Banks should be careful when granting credit to these greedy old Seniors.

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