KUALA LUMPUR: The banking industry will provide a targeted moratorium extension and provision of repayment flexibility to those severely impacted by the fallout from the Covid-19 pandemic, Bank Negara said.
The central bank issued the statement on Wednesday following Prime Minister Tan Sri Muhyiddin Yassin’s announcement on measures to assist individuals and SMEs who continue to be affected by Covid-19.
“Ahead of the blanket moratorium ending on Sept 30, 2020, Bank Negara has been working closely with banks to ensure that assistance continues to be provided to borrowers affected by Covid-19.
“Banks stand ready to assist borrowers affected by Covid-19 with repayment plans and other arrangements appropriate to their specific circumstances,” it said.
Bank Negara said income and cash flow challenges remain for some, especially those who have lost their jobs or experienced a reduction in incomes.
“In this regard, a targeted approach ensures that financial resources and attention are prioritised where it is needed the most,” it said.
In a statement, it said the flexibility would be for:
> Individuals who have lost their jobs in 2020 and have yet to find a job will be offered an extension of the loan moratorium for a further three months by their bank.
> Individuals who are still in employment but whose salaries have been affected due to COVID-19 will be offered a reduction in loan instalment in proportion to their salary reduction, depending on the type of financing. Banks will offer the flexibility for a period of 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.
For hire purchase financing, affected borrowers will be offered revised instalment schedules that are consistent with the Hire-Purchase Act 1967.
In addition, banks have also committed to provide repayment flexibility to other individuals and all SME borrowers affected by COVID-19. The flexibility offered by each bank will take into account the specific circumstances of borrowers. This includes:
> Allowing borrowers to pay only the interest portion of the loan over a period of time;
> Lengthening the overall period of the loan to reduce monthly instalments; or
> Providing other forms of flexibility until a borrower is in a more stable position to resume repayments in full.
All other borrowers who have the means should start to repay as it will reduce their overall debt and borrowing cost.