Bank Negara Malaysia (BNM) tonight has ordered an automatic six-month moratorium on all bank loans — except for credit card balances — for those affected by the Covid-19 outbreak.
In a statement, BNM said the measure was designed to ease the cash flow of small and medium-sized enterprises and individuals that are likely to be most affected by Covid-19.
“Banking institutions will grant an automatic moratorium on all loan/financing repayments/payments, principal and interest (except for credit card balances) by individuals and SME borrowers/customers for a period of six months from April 1, 2020,” the statement read.
The moratorium was among the additional measures announced by BNM, which it said are designed to ensure that “the financial intermediation function of the financial sector remains intact, access to financing continues to be available and banking institutions remain focused on supporting the economy during the exceptional circumstances”.
BNM urged banking institutions to provide borrowers and customers with help on the suspended repayments during the moratorium.
For credit card balances, BNM has indicated to banking institutions to offer their customers the option to convert their balances into a “term loan/financing tenure of not more than three years and an effective interest/profit rate of not more than 13% per annum”.
BNM also encouraged banking institutions to facilitate delayed payment requests for corporate borrowers in a bid to “preserve jobs and swiftly resume economic activities when conditions stabilise and improve”.
It will also liberalise lending and financing requirements for the purchase of shares and unit trust fund units.
Earlier today, Malay economic groups had called for businesses to be allowed to defer statutory deductions and exemption from certain taxes for a period to cope with the fallout from the Covid-19 pandemic.
“Deferments or exemptions should be given on obligatory payments and deductions such as EPF contributions, Socso and other related payments for at least six months.
“This can especially help SMEs that form more than 70% of businesses in the country,” the Malay Economic Action Council and Malay Chamber of Commerce had said in a joint statement.
Small-time business operators also voiced their concern about their dire financial straits caused by the implementation of the government’s movement control order.
The traders said they hoped the government could help them with their bank loans until the situation returns to normal.