Loans, who approves them really?
The current public debate on credit reference agencies, CTOS in particular, has seen two opposing views on the desirability to have these agencies working in Malaysia. Whilst there are many reasons given by those who oppose the workings of CTOS, one of the main grouses aired was the fact that applicants for loans or other banking facilities for that matter, have encountered rejection of their application if their names appear on CTOS’s database of those with previous legal proceedings commenced against them.
The argument that having their names “blacklisted” by CTOS and therefore resulted in their application for credit facilities being rejected is obviously unsustainable because at the end of the day, it is the sole discretion of the financial provider to assess the whole set of documents and information before it. The information as provided by CTOS is only one amongst other documents - the others may include salary slips, EA Forms, Income Tax returns, evidence of deposits and other financial liabilities. If at all the financial provider decides to turn down a loan application solely on the premise that the applicant has a previous record captured by CTOS with clear disregard of the other evidence of credit worthiness, do you blame the inflexibility of the banking officer or CTOS?
In any event, financial institutions, being a commercial concern with the aim to maximise profits, cannot be bound to issue loans if they decide not to. That, is the reality which we ought to face.
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