NCBA’s autosweep feature to recover customers' unpaid loans from linked accounts
NCBA's autosweep feature signals a drive by the bank to curb defaults and late payments.
NCBA Bank Kenya customers with loan arrears will have repayments recovered from their other accounts if the designated primary repayment account holds a deficient balance on the date the facility is due.
This comes after the lender unveiled a new account inter-linking feature, called autosweep, which does not require any action from the account holder. The feature signals a drive by the bank to curb defaults and late payments in the event where borrowers lack sufficient funds for automatic deduction.
The feature will give the bank a comprehensive view of customers’ loan obligations and cash balances in their multiple accounts within the institution.
“We are introducing auto sweep, a feature that will ensure seamless loan repayments. If your primary loan repayment account lacks sufficient funds on the due date, the bank will automatically collect the amount due from your other accounts under the same customer number,” the lender said in a text message to customers.
“This helps you avoid late repayment fees and simplifies loan management. No action is needed on your part,” a communication from the lender to its customers reads.
Fixed deposit and junior savings accounts will, however, be exempted from autosweep which targets savings and current accounts that have less withdrawal restrictions.
According to the bank, the feature has been launched in exercise of its right of set-off as embedded in the loan contract arrangement terms and conditions.
If a borrower has multiple loans, the system will prioritise loans based on the due date and loan type, effecting the first settlement to the loan with the earliest due date.
Borrowers cannot opt out of autosweep, as NCBA says activating this option would increase the risk of missed payments and associated penalties.
According to the bank, if there are insufficient funds across all held accounts, the repayment will remain unsettled and will incur late payment fees or penalties.
Customers will receive a notification via SMS after an autosweep transaction is initiated.
