Zafrul: Banks to waive compounded interest

PETALING JAYA: The latest loan moratorium under the RM150bil Pemulih package will not be interest free, but it would help borrowers by deferring the repayment to a later date.

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said on Tuesday the banks will, however, waive the compounded interest or the interest charged on interest accrued during the six-month moratorium period, as well as any penalty charges.

The method of repayment, including on interest charges, is “between the borrowers and the banks,” he told reporters during a virtual briefing.

Tengku Zafrul, who was the former CEO of CIMB Group Holdings Bhd, said the latest loan moratorium is estimated to be about RM80bil and would benefit all households and businesses, regardless of their income range.

No criteria will be imposed on the borrowers.

He also added that there would be no documentation required to apply for the moratorium.

Tengku Zafrul also believes that the domestic financial system will be able to manage the impact of loan repayment deferment.

“From my discussions with the banks, while they will be affected by the loan moratorium, I think they will be in the position to support given the strong capital buffers that they have, ” he said.