No change from earlier decision on hire-purchase loan moratorium, says BNM

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KUALA LUMPUR (May 1): From day one, Bank Negara Malaysia (BNM) has clarified that interest/profit will accrue on all products during the loan repayment moratorium period; hence there is no such thing as making a U-turn or revocation on the earlier decision, its officials said today.

In a media briefing on the moratorium issue here, the officials said they regretted the confusion on procedures for the six-month loan moratorium and were trying their best to clear it up.

"We sincerely regret the confusion. We try to explain; there is no inconsistency on the explanation to the public. There was great excitement when the moratorium was first announced. We took pains even then to point out to borrowers that they need to be aware that interest will accrue on this deferred payment.

"When things get back to normal, the bank needs to advise borrowers on how the deferred payment will be treated. Make sure they (the borrowers) pay attention before taking the moratorium as there is a cost (to it)," said BNM deputy governor Jessica Chew Cheng Lian.

In its announcement on March 25, BNM had already advised borrowers that interest/profit would continue to accrue on deferred payments and they should consider this in deciding whether they wished to take up the moratorium.

Chew said customers could contact their banks directly regarding matters relating to the moratorium and for any financing applications under the stimulus package or Special Relief Facility as announced by BNM.

She added that the Central Bank would come up with several initiatives, including infographics, to help simplify the explanation.

Bank Negara, in a statement yesterday, stated that hire-purchase and fixed rate financing borrowers could expect to be notified via SMS, email or registered mail by their respective banking institutions.

It said those who wished to take up the moratorium under these financing products were now required to formally confirm this with their respective banks on receipt of communication from their banks for the moratorium from April 1 to Sept 30 this year.

Confusion that arose was due to misperception, which was to some extent caused by an illustration provided in its earlier version of Frequently Asked Questions (FAQs) where certain assumptions and caveats were made.