How interest must be recorded

Banks are required to clearly separate interest from the principal amount in their records.

This ensures that customers can always see exactly how much they owe in interest - which cannot generate further interest - and how much they owe as repayment of the principal, which is the original debt and does generate interest.

In the case of short-term credit facilities (i.e. agreements opened and closed within the same calendar year) or when the banking relationship ends, the interest must be paid immediately by the customer on the date the account is definitively closed.

The outstanding balance relating to the principal may continue to generate interest as set out in the contract. However, the amount owed in interest, which must be recorded separately, cannot generate any further interest.

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