Bank Negara: the interest rental-purchase moratorium cannot be greater than the original contract | Malaysia

KUALA LUMPUR, May 1 – Any additional interest that some banks may charge on the deferred payment cannot be greater than the original signed purchase-rental agreement, Bank Negara Malaysia (BNM) said.

BNM reiterated that, as a regulator, it has indicated from the outset that there will be accrued interest or earnings from the six-month moratorium.

“The most important thing is the additional interest that some banks may charge, we have clearly stated that it cannot be higher than the original purchase-rental contract (signed with the borrower),” BNM director of Prudential Financial Policy said today, Cindy Siah Hooi Hoon.

So they can’t go beyond that, he said, adding that BNM has already informed banking institutions about it.

LINK and Regional Office Director Datin Arlina Ariff said yesterday’s announcement was to streamline the process and ensure that everyone gets a clear picture of the postponement under the Procurement and Purchase Act of 1967 (HP Act) and Syariah.

“As a regulator, BNM must make the announcement first followed by banks that would then guarantee the procedures and follow the requirements outlined in the HP Act, as well as the Syariah requirement,” he said.

When asked if those who skipped their April and May payments should pay, Arlina said: “It depends on what the borrowers want to do. If they want to continue the deferment, they can continue to do so (like this).

“There should be no penalty,” he said.

Meanwhile, Lt. Governor Jessica Chew said BNM’s goal was to ensure that people are well informed about the moratorium and the changes that come with the postponement.

“It was an effort to ensure that banks are more systematic about the process,” he said.

Recognizing that the communication could have been made much clearer, he said under the HP Act, any postponement would require all of the steps outlined now.

“Ultimately, when you add all the interest, (it) becomes the same. It is more punitive if you pay early under HP Law. So that’s the only difference.

“Under HP Law, just the act of deferring the payment schedule even in a scenario where nothing changes would require all the additional steps we are talking about now,” he said. – Bernama