Bank Negara introduces standardised housing loan, home financing agreement for retail customers

KUALA LUMPUR: Bank Negara has introduced a standardised housing loan and home financing agreement for retail borrowers/customers.

In a statement, the Association of Islamic Banking and Financial Institutions Malaysia (Aibim) said the initiative seeks to enhance the quality-of-service delivery, promote consumer understanding and comparability of key terms and conditions, and simplify language in such agreements, including borrowers'/customers’ and financiers' responsibilities and obligations.

It added that the move reinforces its commitment to promoting fair consumer outcomes in the financial industry in accordance with the Policy Document of Fair Treatment of Financial Consumers, as well as other relevant policy documents, guidelines and circulars issued by the central bank.

As part of the implementation of the standardisation, financial institutions are required to cease imposing any fee, whether directly or indirectly, on housing loan and home financing documents to lawyers, with effect from Feb 1, 2023.

"Standardising the housing loan and home financing agreement is a significant step forward in enhancing customer protection in the financial industry, and AIBIM members fully supported this initiative," said Aibim president Mohd Muazzam Mohamed.