Automatic six-month moratorium on all bank loans
Automatic moratorium on loan repayments will be granted to small and medium enterprises (SMEs) and individuals — an additional measure taken by Bank Negara Malaysia to relieve the burden on businesses and households that are expected to be affected by the COVID-19 outbreak.
The central bank has written to the commercial bank to inform them of the new measure that will last for six months.
In a document sighted by The Edge, BNM noted that to ease the cash flow of SMEs and individuals that will be affected by the COVID-19 outbreak, banking institutions will grant an automatic moratorium on all loans/financing repayments/payments, principal and interest (except for credit card balances) to individuals and SME borrowers/customers for a period of six months from April 1, 2020.
The automatic moratorium is applicable to the loans/financing that are not in arrears exceeding 90 days as at April 1, 2020 and denominated in the ringgit, it added.
“Banking institutions should provide individuals and SMEs with adequate information on how the suspended loan or repayments will be treated during the moratorium period and options for the borrowers/customers to resume repayments/payments after the moratorium period, particularly if they anticipate that they may still face some difficulty meeting scheduled repayments/payments,” BNM said in the letter.
As for outstanding credit card balances, BNM said banking institutions shall offer customers the option to convert their credit card balances into a term loan/financing of a tenure of not more than three years and an effective interest/profit rate of not more than 13% per annum.
“The implementation of the Net Stable Funding Ratio (NSFR) requirement shall continue to be effective on July 1, 2020. However, the minimum NSFR requirement applicable on July 1, 2020 is lowered to 80%. Banking institutions shall maintain a minimum NSFR requirement of 100% from September 2021,” the letter stated.
The Edge has reached out to BNM on this and will update the central bank’s response.
Source: EdgeProp.my
This is a very very good initiative by the federal, decisive and will be very effective. I wonder if at our state level, is our state gov planning anything to give PG economy a push?? Or still sitting there doing nothing until penang property collapse?
Even if the state gov doesn’t want to dig into its own pocket to come up with the money to push PG economy, at least do something that costs PG state gov nothing, like converting some leasehold properties to freehold for example.
That will effectively “put money into the property segment” by way of increasing the value of those properties, without having to pump real money into PG economy from state coffers. If done right, these properties will become attractive to foreign buyers, therefore attracting capital from overseas, increasing excitement in local property scene, and creating a virtuous cycle of investment/buying activities.
Rocket state don’t know how to do this one lah. They only know how to give 300 to hawkers lah, 200 to old people lah, this kind of small sweets. Haiya, but they dont know big policy or big economy lor.
@JustinB
Well, I don’t think the Penang government should be doing anything with regarding to the property market; it is beneficial for most anyway if the property market collapse as it has always been driven by greed, only the rich and greedy one will be affected if the property market collapse, whilst the average family finally has the chance to own a sub-1k square foot house for their living.
@Tan
I understand your standpoint in terms of home affordability. But a prolonged property market depression is in fact bad for everyone, including the not-so-rich genuine owner-occupiers because :-
(1) property is an important big family asset for these people, possibly a big part of their retirement savings
(2) it makes disposing of current property difficult, hence upgrading to a bigger/better property difficult.
In general, foreign buying (long term investors, not hot money) increases forex inflow (it helps our forex rates), attracts residency of foreigners therefore making PG cosmopolitan (an important ingredient in making PG a tech hub) etc.
You may have a very valid concern about foreign purchasing causing overpricing of PG properties, making it unaffordable for locals, as this has been precisely the policy failure of our state gov for the last 10 years, during which there was no effective policy in controlling buying patterns, causing initially huge price surge, followed by a panic mass over building, and subsequently resulting in an unprecedented glut and market depression.
An effective policy would have contained foreign buying and investors in certain areas where demand from local working class is minimal while having certain attributes attractive to foreigners/investors (eg. tanjung bunga/tokong/pulau tikus area). An effective policy would have resulted in more affordable housing being built in areas where there is big demand from local working class, therefore influencing the price levels in such areas to ensure affordability (eg. bayan baru, lepas, sg. ara within which most residents work in the FTZ).
With good measures, you can ensure BOTH affordability for locals in the right area, as well as foreign buying and investments in other areas. The best of both worlds!!