KUALA LUMPUR: Malaysia is the only country to have introduced a six-month loan moratorium for borrowers automatically, said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
The moratorium in place since April was for the benefit of individuals and small- and medium-sized enterprises (SMEs) during the Movement Control Order to fight the spread of Covid-19, he said following a three-month moratorium extension to certain groups announced by Prime Minister Tan Sri Muhyiddin Yassin yesterday.
Tengku Zafrul was hopeful that the extension would be a relief for those affected by the Covid-19 pandemic.
"Aside from the RM100 billion of moratorium by banks, the government has also introduced various measures to help individuals and businesses, such as Bantuan Prihatin Nasional, which has to date amounted to RM11.16 billion and benefited 10.42 million Malaysians through wage subsidy and worker retention programmes totalling RM17 billion," he added.
Bank Negara Malaysia said the more targeted approach to assist those affected by Covid-19 would ensure that financial resources and attention were prioritised.
The central bank said ahead of the end of the blanket moratorium on Sept 30, it had been working closely with banks to ensure that assistance continued to be provided to borrowers affected by the pandemic.
Muhyiddin yesterday announced a three-month extension of loan repayment moratorium for those who lost their jobs this year due to the pandemic and had yet to secure employment.
A targeted approach, meanwhile, will be undertaken for the rest of those affected, including SMEs.
Bank Negara said individuals who were employed but whose salaries had been reduced would be offered a reduction in loan instalments in line with their salary reduction, depending on the type of financing.
"Banks will offer flexibility for at least six months. Banks will also consider extending the flexibility at the end of that period, bearing in mind the salary of the borrower at that time," it said yesterday.
For hire purchase financing, affected borrowers would be offered revised instalment schedules according to the Hire-Purchase Act 1967, it added.
Bank Negara said banks were also committed to providing repayment flexibility to other individuals and all SME borrowers affected by Covid-19.
"All other borrowers who have the means should start repaying as it will reduce their overall debt and borrowing cost," it said.
To obtain the flexibilities, borrowers need to apply directly to their banks from Aug 7.
Bank Negara said it had communicated to the banks to provide a simplified application and documentation process.
It also said in recognition of the exceptional circumstances, the flexibilities provided during the period would not appear in the CCRIS report of borrowers.
"To ease concerns of borrowers with loans from multiple banks, they may also approach the relevant one-stop centre to work out an appropriate assistance package at the Credit Counselling and Debt Management Agency and Small Debt Resolution Scheme."
