More Malaysian banks offer loan repayment moratoriums to virus-hit clients

This article first appeared in The Edge Financial Daily, on March 20, 2020.
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*Below this article is a link to a list of the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) member banks offering assistance*

KUALA LUMPUR: More Malaysian banks, including Public Bank Bhd, RHB Bank Bhd and MBSB Bank Bhd, have announced that they are offering moratoriums of up to six months for loan repayments to clients hit hard by the continued proliferation of Covid-19.

In a statement, Public Bank said it is offering the immediate moratorium for monthly instalment payments of loans and financing to individuals and business customers affected by the pandemic, while it continues to accommodate requests to restructure or reschedule loans and financing.

It is also working with Bank Negara Malaysia (BNM) to offer a special relief facility for its small and medium enterprise (SME) customers, and that it has enhanced its internal processes to facilitate faster loan approval and disbursement to assist eligible SME customers to overcome their financial constraints under the current situation.

The banking group stressed that it will be operating as usual during the movement control order, while ensuring uninterrupted access to all its services nationwide during the containment period. Having said that, it advised customers to use its electronic and mobile banking and other online services as part of social distancing measures to ensure the effective containment of the virus.

RHB Bank and its Islamic arm, RHB Islamic Bank, meanwhile, are offering the moratorium as part of their financial relief programme that has been in place since Feb 11, which includes the restructuring or rescheduling of loans and financing for viable businesses and individuals.

“We have so far received 119 applications [under the programme] from customers across all segments, involving total financing of about RM1.15 billion. We have also proactively identified 168 SME customers in heavily impacted sectors such as tourism and food and beverage, who are in need of financial assistance.

“A six-month moratorium is being offered to assist them during this challenging period. The bank will continue to proactively reach out to affected SMEs to ease their financial burden,” said the banking group’s group managing director Datuk Khairussaleh Ramli in a separate statement.

In addition, Khairussaleh said BNM is also providing a RM2 billion Special Relief Facility, which will be deployed in the form of working capital to assist SMEs in alleviating short-term cash flow problems. “This is part of Bank Negara Malaysia’s Fund for SMEs, which was made available starting March 6, 2020. To date, we have already received 135 applications, totalling more than RM100 million,” Khairussaleh added.

MBSB Bank president and chief executive officer Datuk Seri Ahmad Zaini Othman, who announced that the bank was offering similar relief measures yesterday, said corporate and SME clients that are directly or indirectly impacted by the pandemic, especially those in the hospitality and tourism sector, may apply for financing restructuring and rescheduling.

The bank has also taken precautionary measures by splitting its critical functions to operate from primary and secondary sites to mitigate the risks of business disruption, he added in another statement.

Similarly, the Association of Islamic Banking and Financial Institutions Malaysia said its member banks are offering financial help to businesses and individuals affected by the pandemic.

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Financial assistance offered by AIBIM member banks due to Covid-19 outbreak