Bank Negara Malaysia (BNM) is implementing additional measures to assist borrowers by granting automatic moratorium for a period of 6 months.
In a latest circular issued by BNM to banking institutions, the bank said the automatic moratorium is for all loan/financing repayments/payments, principal and interest (except for credit card balances) by individual and Small Medium Entrepreneur borrowers starting from 1 April.
This means, the borrowers are allowed to delay the repayment of their existing loans, including mortgages and hire-purchases for the said period.
However, the automatic moratorium is applicable to loans/financing that are not in arrears exceeding 90 days as at 1 April 2020 and denominated in Ringgit Malaysia.
This is part of the central bank’s new measures to assist borrowers experiencing temporary financial constraints due to the Covid-19 outbreak.
The moratorium does not apply to credit card balances and for outstanding credit card balances, BNM said customers should be offered the option to convert the outstanding balances into term-loan of not more than three years.
“For corporate borrowers, banking institutions are strongly encouraged to facilitate requests for a moratorium.
“Banking institutions should provide individuals and SME borrowers with adequate information on how the suspended loan/financing repayments/payments will be treated during the moratorium period,” said the central bank.
The official announcement regarding this measure is expected to be announced soon.