Africa-Press – Uganda. You will now not be penalized for clearing your loan obligations early after the Uganda Bankers’ Association (UBA) agreed to drop what has been for a long time regarded as an “unfair” requirement.
The press has seen a correspondence dated October 16, 2023, by UBA, notifying the Bank of Uganda Executive Director in charge of Supervision, about the decision to drop early repayment fees also known as charge.
“This correspondence serves to notify you that at our monthly CEOs meeting of October 13, 2023, a decision was reached to drop/abolish the practice of early repayment fees/charges on outstanding loans across our membership/industry,” reads in part the letter signed by the UBA executive director, Mr Wilbrod Owor and copied to the Deputy Governor and all UBA member CEOs.
The letter further reads: “The meeting further agreed that BoU be notified of this decision with immediate effect and that members handle applicable communication to their customers as appropriate.”
The Head of Communications and Corporate Affairs at UBA, Ms Patricia Amito, confirmed the development, saying the move to abolish the early repayment requirement means that if a customer decides to pay early or before the agreed loan payment time frame, there will be no fine incurred or any consequences resulting from doing so.
“If your loan was meant to be repaid in 24 months and after 12 months you decide to clear it, now you will not be subjected to a fine,” she said.
This development is pending BoU approval after a meeting between the BoU and UBA which will be held tomorrow October 18, 2023, according to Ms Amito.
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