Bank Negara Malaysia has announced an automatic six-month moratorium on all bank loans for all banking customers, include individual and small & medium sized enterprises (SMEs). For those who are affected by Covid-19 outbreak are allowed to delay their repayment of existing loans, except for credit card balances.
In a statement by the central bank’s deputy governor Jessica Chew, BNM said the measure was designed to ease the cash flow of small and medium-sized enterprises and individuals that are likely to be most affected by Covid-19.
“Banking institutions will grant an automatic moratorium on all loan/financing repayments/payments, principal and interest (except for credit card balances) by individuals and SME borrowers/customers for a period of six months from April 1, 2020,” the statement read.
The moratorium is automatically applicable to loans and financing that are not in arrears exceeding 90 days as at April 1, 2020 and is denominated in Malaysian Ringgit.
Banks are also encouraged to extend the moratorium to corporate players if they have proven to be a viable investment in the past.
For outstanding credit card balances, BNM has instructed banking institutions the option to convert their credit card balances into a term loan/financing tenure of not more than three years with an effective interest/profit rate of not more than 13 per cent a year.
“Banking institutions should provide individuals and SME borrowers with adequate information on how the suspended loan/financing repayments/payments will be treated during the moratorium period,”
Banking institutions may also extend these options beyond the end of this year in the interest of their borrowers and customers.
To enable banking institutions to focus their efforts on their customers, the central bank has also promised for the moment to suspend any new statistical reporting requests barring those require to address Covid-19’s impact.