We never stated interest would be waived, says BNM over confusion

Bank Negara Malaysia says banks are required to comply with the Hire Purchase Act 1967 and obtain an indication of agreement from customers.

PETALING JAYA: Bank Negara Malaysia (BNM) has maintained that there are no changes to the policy for the six-month moratorium on hire purchase loan repayments and fixed-rate Islamic financing, after an announcement yesterday sparked confusion among the public.

BNM deputy governor Jessica Chew Cheng Lian said no one needed to apply for the moratorium but the banks had to comply with the Hire Purchase Act 1967 and obtain an indication of agreement from customers.

She said the banks would be reaching out to their customers to guide them on what to do.

“We have also made it clear to the banks that they must make it as convenient as possible for borrowers to complete the process,” she said in a teleconference briefing with the media today.

BNM Prudential Financial Policy director Cindy Siah Hooi Hoon said the central bank had never stated that interest would be waived, adding that it had made it clear previously that interest would continue to accrue.

Siah said BNM had also emphasised that borrowers needed to understand how their repayments would change if they were to take up the moratorium offer.

BNM, she said, had also stated that additional interest rates that some banks may charge cannot exceed the rate stipulated in the original hire purchase contract.

Chew acknowledged the confusion that arose over interest rates, saying the few parties that had spoken on this issue had created different impressions on how it would work.

“We do regret that very much and we do hope that we can help to set things right and clarify matters,” she said.

She said the previous FAQ put up by BNM, which described effects of the moratorium on the different types of loans, were only an illustration, adding that it did not represent all the banks.

“As soon as banks started coming out (with their own FAQs), we thought it would be less confusing to take ours down. So, we have done that,” she said.