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Banks to provide targeted moratorium extension, repayment flexibility after Sept 30

29 Jul 2020 / 22:18 H.

PETALING JAYA: Ahead of the blanket moratorium ending on Sept 30, Bank Negara Malaysia (BNM) said it has been working closely with banks to ensure assistance continues to be provided to borrowers affected by Covid-19, via repayment plans and other arrangements appropriate to their specific circumstances.

However, in line with Prime Minister Tan Sri Muhyiddin Yassin’s announcement today on measures to provide a targeted extension of the moratorium and repayment flexibility to individuals and SMEs who continue to be affected by Covid-19, the central bank said the banking industry will provide a targeted moratorium extension and provision of repayment flexibility.

Firstly, individuals who have lost their jobs in 2020 and have yet to find a job will be offered an extension of the loan moratorium for a further three months by their bank.

For individuals who are still in employment but whose salaries have been affected due to Covid-19 will be offered a reduction in loan instalment in proportion to their salary reduction, depending on the type of financing.

“Banks will offer the flexibility for a period of at least six months. Banks will also consider extending the flexibility at the end of that period, bearing in mind the salary of the borrower at that time,” it said in a statement.

For hire purchase financing, affected borrowers will be offered revised instalment schedules that are consistent with the Hire-Purchase Act 1967.

In addition, banks have also committed to provide repayment flexibility to other individuals and all SME borrowers affected.

The flexibility offered by each bank will take into account the specific circumstances of borrowers including allowing borrowers to pay only the interest portion of the loan over a period of time, lengthening the overall period of the loan to reduce monthly instalments or providing other forms of flexibility until a borrower is in a more stable position to resume repayments in full.

“All other borrowers who have the means should start to repay as it will reduce their overall debt and borrowing cost,” it said.

BNM said to obtain these flexibilities, borrowers need to apply directly to their respective banks beginning Aug 7, and to ease the concerns of borrowers with loans from multiple banks, they may also approach the relevant “one-stop” centre to work out an appropriate assistance package.

This would be Agensi Kaunseling dan Pengurusan Kredit (AKPK) for individuals and Small Debt Resolution Scheme (SDRS) for SMEs.

“BNM has communicated to the banks to deliver a simplified application and documentation process for borrowers. In recognition of these exceptional circumstances, the flexibilities provided to borrowers during this period will not appear in the CCRIS reports of borrowers,” it said.

In addition, the central bank will monitor the progress of banks in assisting borrowers that may continue to face temporary financial difficulties, and continue to focus efforts in ensuring that the banking system continues to carry out its intermediation function effectively in support of the economic recovery.

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