PETALING JAYA: From Jan 1, all commercial banks will be required to adopt standardised documents for housing loans and home financing agreements involving a principal sum of RM500,000 and below.

Bank Negara said the move was to enhance borrowers’ understanding of the key terms and conditions of the loan agreements, including comparing such agreements.

It said banking institutions were required to present the key terms and conditions by following a template developed by the Association of Banks in Malaysia in consultation with Bank Negara Malaysia.

“The template describes these key terms and conditions using simplified language.

“This will assist consumers when making comparisons between banks and reduce the risk of borrowers who don’t fully understand the contractual terms of their agreements.”

Bank Negara said the initiative was a collaboration between the central bank, Pemudah and the financial industry.

The public can access the template and FAQs at at www.abm.org.my.

Source: The Star