PETALING JAYA: Bank Negara Malaysia’s (BNM) six-month moratorium on loan repayments in light of the Covid-19 crisis may come as a relief for many, but this breather is accompanied by several conditions depending on the bank in question.
The moratorium is applicable to performing loans denominated in ringgit that have not been in arrears for more than 90 days as of April 1, with different conditions on interest rates imposed by individual banks.
Below is a breakdown of some of these conditions.
Under its conventional loans, that is loans not backed by the government, customers who defer will pay more interest.
“Simple interest will continue to be charged on the outstanding balance without compounding during the moratorium period,” it said in a statement on its website.
For loans with Public Islamic Bhd, customers who defer loan repayments will not pay more profit charges.
Hong Leong Bank
Interest and profit will continue to accrue on loans and financing repayments that are deferred.
“This means the accumulated repayment amount during the deferment of repayment period will be added to the outstanding loan and financing amount,” it said on its website.
It also advised customers to discuss suitable plans to repay the principal and interest accrued during the deferment period.
Malayan Banking (Maybank)
Under conventional loans, interest will continue to accrue on the outstanding principal amount during the moratorium period.
“The interest will be slightly higher as the loan principal is not repaid or reduced during the moratorium period,” it said on its website.
As for Islamic financing, profit will continue to accrue on the outstanding principal amount.
“Such profit however will not be compounded in line with shariah principles,” it said.
For hire purchase, the repayment amount will remain unchanged for both conventional and Islamic loans.
Interest will continue to be charged throughout the six-month period.
Customers only need to pay instalments after the deferment period.
RHB Banking (RHB)
It will not be compounding interest during the six-month moratorium as this is only applicable to retail and SME customers.
For Islamic financing, the principle of no compounding of profit will continue to be observed.
The moratorium will apply automatically to all RHB Bank and RHB Islamic Retail and SME customers with the exception of loans and financing facilities that are in arrears exceeding 90 days as of April 1.
Customers who do not wish to defer repayments may continue making regular instalments. Payment amounts will remain unchanged after the moratorium is lifted.
Under the moratorium, loans and financing tenures will also be extended for six months.
No late payment charges or penalties will be imposed. However, interest and financing charges will be imposed on deferred payments.
“Upon expiry of the moratorium period, the repayment will be adjusted to reflect the interest and financing charges imposed,” it said.
Those who are interested in the moratorium programme should owe no outstanding payments for more than 90 days.
BNM recently announced that all financial institutions regulated by it would offer a six-month deferment of loan or financing repayments starting next month, applicable for all ringgit-denominated performing loans that have not been in arrears for more than 90 days as of April 1.
However, the central bank said interest would continue to be accrued for conventional loans (excluding hire purchase loans) while profit from Islamic financing would be accrued but not compounded.
Customers will be charged interest and profit but will not be required to make repayments until the end of the moratorium period.
The tenure will remain the same while the instalment amount will be adjusted to reflect the remaining tenure.
In a notice on its website, it said customers who wish to extend their tenures should call the bank for further details.