KUALA LUMPUR: Despite the various initiatives by the Government to ease the burden on bank loan borrowers, many are not getting the full benefits.
For instance, many banks have yet to reduce the monthly loan repayment instalments for facilities where the interest rate is pegged to the base lending rate (BLR), Federal Territory MCA Public Service and Complaint Bureau chief Dr Jeffrey Goh said.
The Association of Banks Malaysia (ABM) was quoted on Feb 25 as saying that all commercial banks would be reducing the monthly loan repayments to help borrowers in the current economic downturn.
This followed Bank Negara’s move on Feb 24 to reduce the Overnight Policy Rate (OPR) from 2.5% to 2% to give the public more disposable income.
This reduction, in turn, was reflected in the reduction of the BLR from 5.95% to 5.55%.
Banks had the option of either shortening the tenure of the loans and maintaining the monthly loan repayments, or reducing the monthly repayment and maintaining the tenure. Banks had agreed to go with the latter.
“However, many banks have yet to make the reduction, with the exception of Maybank and HSBC,” Dr Goh told a press conference here yesterday.
“I have received feedback that many banks gave the excuse that they were not aware of the move, or that they had yet to receive any directive from Bank Negara.
“Some also say that borrowers who want the reduction should write in individually to the bank.”
Dr Goh also criticised banks for not implementing the deferment of repayment for housing loans for retrenched workers for a year as stated in the mini-budget.
“Many banks are not implementing this, and when I asked what the procedure was, their reply was ‘We don’t know. We don’t have any directive from Bank Negara yet’,” he said.
“The government initiatives are good, but if they are not implemented well, they will not be felt by the public,” Dr Goh added.