FAQs on Bank Negara Malaysia’s Loan/Financing Deferment Measure

In this guide, we help answer some questions on the Loan/ Financing Deferment Measure, and compiled a list of Malaysian banks to assist those who are affected by Covid-19.
Malaysian banks offer aid to customers affected by pandemic

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Updated on 31 March, 2020

In light of the Government's Movement Control Order to curb the spread of the novel coronavirus (Covid-19) pandemic, many have been left worried about their loan repayments and financing.

With the current restriction on movement, many individuals and businesses will be affected by the pandemic and Bank Negara Malaysia (BNM) has stepped up efforts by instructing all banks to provide financial relief in the form of automatic moratorium or also known as deferment package for all loan/financing repayments/payments, principal and interest (except for credit card balances) for individuals and small and medium-sized entrepreneurs (SMEs) borrowers/customers for a period of six months from April 1, 2020 for those who are affected.

PropertyGuru Tip
A moratorium is the stopping or delay of something for an agreed period of time

To simplify it, according to BNM, during this period, borrowers/customers with loan/financing that meet the conditions do not need to make any repayment, and no late payment charges or penalties will be imposed.

The moratorium is automatically applicable to all loans and financing that are:

  • not in arrears exceeding 90 days as at April 1, 2020
  • is denominated in Malaysian Ringgit

Real estate concept. House on calculator. Mortgage.

Who is eligible for the automatic moratorium or deferment package?

This relief is for SMEs and individuals who face temporary financial constraints arising from the Covid-19 pandemic. Meanwhile, corporate borrowers/customers may request for a moratorium on loan/financing repayment from their respective banks as well. 

There are a few points to take note if you are one of those who are affected as BNM has clarified some of the fundamentals about the automatic moratorium or deferment package. 

As this announcement is still fresh, let us clear some of your doubts with some facts provided by BNM as below: 

Question

Answer

Which financial institutions offer this deferment package?

All licensed banks, licensed Islamic banks, licensed investment banks and prescribed development financial institutions (DFIs) regulated by BNM (financial institutions or FIs) will provide this deferment flexibility. Borrowers/customers that meet the eligibility criteria can avail themselves to this flexibility

Does this deferment package apply to newly approved/ disbursed loans?

It applies to all loans/financing outstanding as at 1 April 2020.

Would my loans with other non-bank credit providers qualify for this deferment package?

No. Other non-bank lenders or credit providers that are not regulated by BNM are not participating institutions in this package.

How is the deferment package different from the other loan/financing moratoriums announced by banks recently?

Financial institutions (FIs) have been proactive in responding to the needs of their borrowers/customers with various rescheduling and restructuring packages offered to assist affected borrowers/customers. Such efforts are highly commended and encouraged to continue.

The deferment package is an extension of these measures across all FIs to widen access to short-term financial relief by households and businesses that need it the most in these challenging times.

Do I need to apply?

No. All individual and SME loans/financing (excluding credit cards) that meet the criteria will automatically qualify for the deferment.

Will I be charged additional interest on the repayment amount that is deferred by 6 months during the period?

For conventional loans, interest will continue to be charged on the outstanding balance comprising of both principal and interest portion (i.e. compounded) during the deferment period. However, some FIs may decide not to compound interest during the deferment period. Please check your respective FIs’ websites for further information.

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.

FIs are not allowed to impose late penalty charges on the deferred amount. In other words, the loan/financing payment is just deferred by 6 months.

What would happen to my loan/financing repayments after the deferment package period? How does being in the deferment package affect my interest payments after the 6- month period? Is there an increase in monthly payments, or longer tenure?

Borrowers/customers are reminded to carefully consider the payment options proposed by their FI, in particular on how to resume payments after the deferment period. This may include higher subsequent instalment amount while preserving the original loan/financing tenure, or an extension of the loan/financing tenure after the 6 month deferment period.

Borrowers/customers should make sure they understand the overall financial implications and their ability to meet these and should reach out to their FIs via calls/e-mails if more information is required.

If I opt for the deferment, will my CCRIS records be adversely affected?

No. Your CCRIS will not be affected during the deferment period. It will remain similar as per the status as at March 2020 throughout deferment period. 

Will the bank automatically stop the repayment requirement if I did not respond to their notification?

Yes.

I want to continue with my loan/financing repayments. How do I opt-out of the automatic deferment package?

You should contact your bank if you wish to opt-out of the automatic deferment package, or continue to make timely and full repayment of your loan/financing.

How should I notify the bank that I wish to opt-out of the deferment offer?

Please respond to the notification sent by the bank and informed that you wish to opt-out of the automatic deferment package, or continue to make timely and full repayment of your loan/financing.

My loan/financing is in default, can I qualify? Can loans under rescheduling and restructuring (R&R) program be eligible for the deferment package?

Loans/financing accounts that are already more than 90 days in arrears, will not qualify for the deferment. Borrower/customers are advised to approach their banks to seek assistance. Loans/financing under R&R program is also eligible for the deferment subject to meeting the criteria.

I have a loan/financing which is automatically deducted from my salary. Do I qualify for the deferment?

Yes. However, if you wish to opt-out of the deferment and continue paying your loans/financing via your existing autodebit arrangement please inform your FI accordingly. 

What would my housing loan/financing monthly payment look like after the 6 months deferment period?  

Monthly instalment before deferment

Monthly instalment after deferment

RM1,438

RM1,483
(RM45 increase)

The above illustration of a conventional housing loan is based on these assumptions:

  •  No extension of tenure after deferment period
  •  Loan amount - RM300,000
  • Interest rate - 4.6% p.a. (interest not compounded during deferment period)
  • Original tenure - 35 years, and borrower has repaid for 5 years
  • Principal and interest payments suspended during deferment period
  • Outstanding principal before deferment period - RM280,585
  • Outstanding amount post-deferment to be repaid within 29.5 years = RM287,038 

 My loan/financing is under AKPK’s Debt Management Programme (DMP). Do I qualify for the deferment? 

Yes. Similar to other loans/financing with FIs, interest/profit will continue to accrue on loan/financing payments that are deferred. Borrowers/customers are advised to contact AKPK to discuss options available to borrowers/customers under the DMP. 


Man is hate and sad with the white mail message or the bill.

**As of today, banks have made the decision that they will not be compounding the interest during this moratorium. 

  • Affin Bank 
  • Alliance Bank 
  • Ambank
  • BSN
  • Bank Islam 
  • Bank Muamalat
  • Bank Rakyat
  • CIMB
  • Citibank
  • Hong Leong Bank 
  • HSBC
  • Maybank
  • MBSB Bank (only Islamic Bank)
  • OCBC
  • Public Bank
  • RHB
  • Standard Chartered
  • UOB

We highly suggest you refer to your bank for the latest details.

Should you opt-in or out of loan deferment?

Read More

Should you opt-in or out of loan deferment?

 

To ease your search, here's a list of banks to contact if you would like to further clarify the process: 

Bank

Contact

Affin Islamic Bank Berhad

 Branch / Call 03-8230 2222

Agrobank

Call 1300 88 2476

Al Rajhi Bank

Email to customersupport@alrajhibank.com.my

Alliance Bank

Call customer service 03-5516 9988

Alliance Islamic Bank Berhad

Call 03-5516 9988

AmBank

Branch/email to customercare@ambankgroup.com / call 03-2054 6688

AmBank Islamic Berhad

Call 03-2178 8888

Bank Islam Malaysia Berhad

Call 03-2690 0900

Bank Muamalat Malaysia Berhad

Call 1300 88 8787

Bank Rakyat

Call 1300 80 5454

BSN

Call customer service 1300 881 900

CIMB Bank

Branch / Online

CIMB Islamic Bank Berhad

Call 03-6204 7788

Hong Leong Bank

Branch / Call 03-7626 8899 /  Email to Hlonline@hlbb.hongleong.com.my

Hong Leong Islamic Bank Berhad

Call 03-7626 8899

HSBC Bank

Call 1300 88 2626 / Online

Maybank

Branch / Online

Maybank Islamic Berhad

Call 1300 88 6688

MBSB Bank

Email to ecu.careline@mbsbbank.com

OCBC

Branch / Call 03-8317 5000

OCBC Al Amin Bank Berhad

Call 03-8314 9310

Public Bank

Branch / Call 1800 225 555 / email to  pbbsmesupport@publicbank.com.my

Public Islamic Bank Berhad

Call 1800 22 5555

RHB

Branch / email to customer@advocacy@rhbgroup.com or Call 03-920 68118

RHB Islamic Bank Berhad

Call 03-9206 8118

SME Bank

Call 03-2603 7700

Standard Chartered Saadiq

Call 1300 88 8888

UOB

Call 03-2612 8121

According to the BNM statement, banks are also encouraged to extend the moratorium to corporate players if they have proven to be a viable investment in the past.

For corporate borrowers/customers, banking institutions are strongly encouraged to facilitate requests for a moratorium on loan/financing repayment/payment in a way that will enable viable corporations to preserve jobs and swiftly resume economic activities when conditions stabilise and improve.

What about credit card debts?

For outstanding credit card balances, BNM has instructed banking institutions to convert the outstanding credit card balances of cardholders who are unable to meet the minimum monthly repayment consecutively for the last 3 months, regardless of the income levels of the cardholders.

BNM said that if you have been unable to meet the minimum monthly repayment on your credit card consecutively for the last 3 months, your card issuer will convert the outstanding balance into a term loan of not more than 3 years at an effective interest of not more than/financing 13% per annum.

For individuals who have been unable to meet their payments for the last three consecutive months, banks will automatically convert their credit card balances into term loans. The period for the credit card will be observed by banks from April 1 to December 31 this year.

Banking institutions may also extend these options beyond the end of this year in the interest of their borrowers and customers.

So if you are worried of not being able to use your credit card during this time, BNM clarifies that you can continue to use the credit card up to the remaining credit limit after taking into account the balance converted into a term loan/financing.

The outstanding balance converted into the term loan/financing is treated as part of the credit card limit. In addition, the monthly term loan/financing instalments will then form part of the minimum monthly repayment amount on the credit card. 

Meanwhile, according to information in news reports based on the statement by BNM, some lending and financing requirements have been liberalised to further support such activities by banking institutions.

This includes the requirements on lending and financing to the broad property sector as well as lending and financing for the purchase of shares and units in unit trusts which have been lifted with immediate effect.

 

Working from home? Check out this list for tips on working from home for long periods of time.

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