Several banks will not charge interest during loan moratorium
- UPDATED March 28 | UOB added to the list.
- UPDATED March 27 | Addition of Alliance Bank and Affin Bank to the list.
CORONAVIRUS | Bank Negara on Tuesday called on banks to grant an automatic six-month moratorium on all loan and finance payments except credit card balances.
The ordinance specified that the moratorium is scheduled to begin April 1 and aims to ease cash flow for small and medium-sized enterprises (SMEs) and individuals as the country grapples with the health and economic ramifications of the global Covid-19 epidemic.
To be applicable, he said borrowers must not have arrears exceeding 90 days as of April 1 and loans are denominated in ringgit.
Since then, banks across the country have announced their policies in accordance with Bank Negara’s order.
Some have even gone beyond Bank Negara’s instructions to help its clients, for example by not paying interest on loans during the moratorium.
Malaysiakini compiled the policies of various banks:
AmBank and AmBank Islamic will offer automatic payment deferral for loans and financing to all individuals and SME customers.
Customers who wish to opt out can simply continue with their regular monthly payments. There will be no capitalization of interest or profits on loans and financing during this six month period.
Customers with credit card facilities can convert their overdue balances into a 36 month term loan / finance at 13% per annum, also effective April 1.
In addition to the six-month moratorium on loan repayments to all eligible business customers, he announced that there will be no compound interest from April 1 to September 30, 2020.
He said that for Islamic financing, the rates of profit would not be worsened in accordance with the principles of syariah.
Maybank will not charge interest on any personal, SME and non-personal or business loan facilities during the six-month moratorium.
Products eligible under the Automatic Deferral Scheme for Retail and SMEs include Personal Loans, Mortgages, Amanah Saham Bumiputera (ASB), Education and SMEs.
However, qualifying clients other than individuals / businesses must first submit a deferral request through their relationship managers or corporate bankers for approval in order for the non-compounding of interest to apply.
Its fixed-rate sales credits already do not carry compound interest.
For Islamic finance facilities, profit rates are already not compounded in accordance with the principles of syariah.
CIMB Bank and CIMB Islamic Bank Berhad announced that the moratorium would apply to all ringgit-denominated loans and funding held by eligible customers.
For retail customers, eligible Islamic and conventional products include ASB financing, real estate financing, automobile financing and personal financing (express cash, cash plus loan and Awam-i).
For SME customers, he said the moratorium applies to all existing term loans and finance and industrial hire-purchase.
Interest and profits will continue to accrue on the deferred loan and the financing repayments that are deferred.
Interest on conventional loans will not be compounded during the moratorium period, while the profit rate of Islamic finance will not be compounded in accordance with syariah principles.
Retail customers who choose to opt out of the moratorium are encouraged to text the bank. Details of the SMS deactivation will be available on the CIMB website on March 31.
SME clients who wish to opt out are invited to visit the CIMB website to complete the electronic Let-Us-Call You form, or they can contact their relationship manager.
Credit card customers can choose to convert their card balance to a term loan or financing at 13% per annum and for up to three years.
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RHB will not charge interest during the bank’s six-month loan repayment moratorium for retail and SME clients from April 1.
For Islamic financing, RHB will continue to observe the principle of no compound profit.
OCBC Bank and OCBC Al-Amin Bank will not earn interest during the six-month loan repayment moratorium for retail clients as well as SMEs from April 1.
Alliance Bank will not charge interest on conventional loans during the term of the moratorium.
In accordance with the principles of Syariah, the profit of Islamic financing is not aggravated.
However, interest / profits on deferred loan / finance repayments will continue to accumulate.
Credit card users can convert their overdue balances into a three-year term loan at an effective interest rate of 13.0% per annum.
Retail and SME customers who wish to opt out of the automatic six-month moratorium can do so by replying to an SMS message before March 30.
Affin Bank Bhd and Affin Islamic Bank Bhd offer their retail and small and medium business (SME) clients interest or uncompounded earnings for six months on term loan and term finance.
United Overseas Bank (Malaysia) Bhd (UOB Malaysia) also announced that it will not account for interest on loans and mortgages for all eligible individual and small and medium-sized enterprises (SMEs) customers during the six-month moratorium period. .
For its Islamic banking customers, the bank said it will continue to observe the Sharia principle of not generating profit on Islamic financing facilities.
âNot all retail and SME customers need to apply because they are automatically eligible for Bank Negara Malaysia relief measures.
âTheir loans and mortgages will not be charged compound interest during the moratorium period,â the bank said in a statement today,
The bank also said that any interest or profit accrued during this period will not be charged and the bank will not impose late penalties on the deferred amount.
These measures will come into force on April 1, 2020.
However, individuals and SME customers who choose to opt out of this automatic moratorium will have to notify the bank.
Client companies, for their part, can choose to register by submitting their moratorium request through their UOB relations officers and will be examined on a case-by-case basis.
UOB Malaysia will also absorb the fees charged to customers when they use another bank’s ATM to withdraw money from their UOB bank account.
List compiled from Bernama.