Waive additional interest on hire purchase financing, be compassionate banks

  • Letters
  • Sunday, 03 May 2020

Bank Negara Malaysia should heed the voices of the rakyat and intervene in moratorium disputes arising from loan repayments.

The central bank should instruct banks and financial institutions to exercise one-off measures which include waiving additional interests.

This will assist the rakyat in overcoming the present and future financial difficulties.

If different financial institutions have different measures, these will confuse the rakyat, and it will be difficult to sooth people’s frustration.

The government’s original announcement had gained widespread approval from the rakyat. But the recent “clarification” from Bank Negara three days ago resulted with ire from borrowers whereby many complaints have been aired.

Many people are constrained in a tight economic situation since the execution of the movement control order following the Covid-19 outbreak. Even if they receive government assistance, this only alleviates financial burdens. Therefore, the banks’ moratorium on loan repayments assists borrowers to have more liquidity in funds to cope with daily living expenses.

By spending their money in the market, the public indirectly contributes to the nation’s economic activities and recovery.

Therefore, it is highly recommended that banks involved in loan deferment should consider exempting the additional interest in hire purchase financing and fixed-rate Islamic financing during the six-month deferment period.

On Thursday (April 30), Bank Negara announced that all hire purchase financing and fixed-rate Islamic financing require additional documents on the extension of repayment, and additional interest would be levied for the extension.

This resulted in grave customer dissatisfaction as many were given the impression that no additional interest would be charged during the repayment period.

Measures by financial institutions should continue the previous practice ie. borrowers need not apply for or submit documents separately.

They should be exempted from the various procedures, to avoid crowds at banks and financial institutions, which can increase the risk of infection.

Nicole Wong Siaw Ting

MCA Youth national chairperson

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3

Did you find this article insightful?


85% readers found this article insightful

Across the site