PETALING JAYA: The banking industry is urging borrowers and customers who are facing financial difficulties in servicing their commitments to reach out to their respective banks as soon as possible between Aug 7 and Sept 7.
This is to facilitate the discussion of repayment assistance options and to allow sufficient time to confirm options and to have it effected in time come October.
The Association of Banks in Malaysia (ABM) and the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) said its member banks will evaluate the financial position of the borrowed and customers at the end of the relief period to consider whether further repayment assistance is needed.
For hire purchase loans or financing, those affected will be offered revised instalment schedules that are consistent with the Hire Purchase Act 1967 or equivalent Islamic banking policies.
“In all cases, borrowers and customers will have to contact their banks to discuss options that are available to them and apply for these reliefs.
“Member banks have made efforts to simplify the application and documentation process, ” ABM and ABIM said in a joint statement yesterday.
Under the targeted repayment assistance measures announced by Prime Minister Tan Sri Muhyiddin Yassin on Wednesday, conventional and Islamic banks will provide additional assistance post-Sept 30, specifically for individuals who have lost their jobs in 2020 and to those who are suffering from a drop in income – collectively known as the Severely Affected Categories – due to the coronavirus (Covid-19) pandemic.
Those who have lost their jobs and are yet to secure one must apply to their banks for a further three-month extension on the moratorium, while those experiencing a pay reduction must contact their banks to change the terms of their financing facility so that the monthly instalment will be commensurately reduced for at least six months from Oct 1, depending on the type of loan or financing.
ABM and ABIM added that assistance is also available for affected borrowers and customers who do not fall within the Severely Affected Categories.
The banks will assist them in a more targeted, case-by-case approach to enable banks to focus on supporting those in real need of assistance whilst also supporting the country’s economic recovery.
These may include, but are not limited to SMEs, corporates and other individuals, who are still facing difficulties with their loan or financing repayments and cash-flow problems arising from the pandemic.
“ABM and ABIM understand that this would be a particularly anxious time for many businesses and families, as they begin to find their feet financially as economic activity gradually resumes in Malaysia.
“We would like to assure borrowers and customers of the continued commitment of our member banks to provide additional assistance for those affected by the Covid-19 pandemic.
“Repayment assistance will be available for those adversely affected by the pandemic upon the expiry of the blanket moratorium on Sept 30, ” they said.
The provision of repayment assistance will not appear in the borrowers’ Central Credit Reference Information System (CCRIS) reports so long as they continue to make the repayments promptly based on the agreed revised repayment schedule.
ABM and ABIM also cautioned the public to be wary of scammers and only respond through official bank channels.
“Borrowers and customers are also advised not to deal with any third parties claiming to be agents or representatives of the banks on matters relating to repayment assistance.
“For those whose livelihoods have not been affected, our member banks strongly urge them to resume repayment in October 2020, as this will reduce their overall debt and borrowing or financing costs, ” they said, adding that the banking industry has been working closely with Bank Negara to ensure that assistance continues to be provided to affected borrowers.
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