CB warns banks against misleading, unethical ads
View(s):Commercial and specialised banks have been warned by the Central Bank (CB) against what the regulator termed as “misleading and unethical advertisements”.
In a recent circular to CEOs of commercial and specialised banks, the CB urged all these institutions to “refrain from publishing misleading and unethical advertisements” and to ensure that all important information is highlighted in a visible manner to enable the general public to understand “clearly the nature of the products and the effective interest rates applicable”.
The circular referred to a late-October meeting between the CB and these CEOs where it was pointed out that these institutions publish advertisements in a misleading and unethical manner. One example, it was stated, was the publication of the annual effective rate of interest (AER) of deposits in “small font size which is much smaller or less than that of other important information, promoting deposits without divulging a rate of return, i.e an interest rate or an annual percentage yield”.
The circular said that all institutions should at all times, ensure that all key information including nominal interest rate, AER and credit rating of the bank is published with the same prominence in all advertisements, articles, etc to enable the general public to make informed decisions.