Finance Minister requests banks to abolish accrued interests during moratorium period

By Poovenraj Kanagaraj

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has requested banks to abolish the accrued interest on hire purchase loans and profits on fixed-rate Islamic financing during the six-month moratorium period.

“Taking into account the possibility it could be implemented and after hearing the requests of the rakyat, I would like to suggest that all financial institution to consider abolishing the accrued interest for hire purchase loans or profits for fixed-rate Islamic financing, for this six-month moratorium period,” said the finance minister in a Facebook post.

In his Facebook post, the finance minister stated that there are banks offering loan deferments without imposing accrued or compounded interest.

However, he clarified that the leeway is not provided for all products of the banks. He further added that the final call lies in the hands of the central bank, Bank Negara Malaysia.

“The finance ministry is set to work hand in hand with BNM and the banking sector to seek a solution,” he said.

The finance minister also stated that the central bank should improve its communication with customers to avoid any confusion, in reference to the FAQs published by BNM that had led to banks announcing no interest will be charged throughout the six-month moratorium period initially.

“There is a misunderstanding in the FAQ posted by Bank Negara. Also, the illustrations provided are confusing.

“But there is no difference in the provisions,” he said.

BNM has since taken off the first FAQ page and has published a new set of FAQs to clear any confusion while expressing regrets on the confusion caused.

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