‘Consider terminating accrued, compound interests’

KUALA LUMPUR: The Finance Ministry has urged banking institutions involved in the six-month moratorium on hire purchase loans and fixed rate Islamic financing loans to consider terminating the accrued interest and compounded interest on them.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said although Bank Negara Malaysia’s (BNM) decision that these loans would face additional interest charges once the moratorium expired and that it is in accordance with the National Bank Act 2009, the ministry wanted to find solutions to the matter together with BNM and banking institutions to decide on a proper outcome.

“The ministry is ready to work with BNM and other banking institutions to ensure that this recommendation can be implemented. The government is always aware of the people’s voices, especially the Bottom 40 and Middle 40 income groups, and we are concerned about the matter.

“In the current economic situation due to the Covid-19 pandemic, I hope the suggestion can lead to some wise reconsideration by BNM and other banking institutions in the country,” he said in a Facebook post yesterday.

He said there was public confusion on the additional interests charged on the loans by banking institutions.

He said one of the reasons for the confusion was because a few sources disseminated unclear information to the public.

“Therefore, on May 1, BNM has issued a Frequently Asked Questions (FAQ) on the moratorium for these loans, which has been updated on its website. BNM also held a press conference to rectify and explain the matter.

“Lately, the mass media and Netizens have raised questions about this issue.

“For your information, there are banks that offer a loan moratorium without accrued interest or compounded interest on the loan.

“However, it does not cover all loan products. Each bank has its approach to providing benefits during the moratorium period.”