Standardised housing loan, home financing agreement significant to enhance customer protection: AIBIM

KUALA LUMPUR: Standardising the housing loan and home financing agreement for retail borrowers is a significant step forward in enhancing customer protection in the financial industry, said the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM).

Its president, Mohd Muazzam Mohamed, said members of AIBIM are fully supportive of this initiative, which was announced by Bank Negara Malaysia.

The central bank announced the introduction of a standardised housing loan and home financing agreement for retail borrowers/customers.

The initiative seeks to enhance the quality-of-service delivery, promote consumer understanding and comparability of key terms and conditions, and simplify the language in such agreements, including borrowers/customers’ and financiers’ responsibilities and obligations.

“This move reinforces the central bank’s commitment to promoting fair consumer outcomes in the financial industry in accordance with the Policy Document of Fair Treatment of Financial Consumers, as well as other relevant policy documents, guidelines, and circulars issued by the central bank,” AIBIM said.

As part of the implementation of the standardised housing loan and financing agreement, financial institutions are required to cease imposing any fee, whether directly or indirectly, on housing loan and home financing documents to lawyers, with effect from Feb 1, 2023. -Bernama