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Finance Minister Urges Banks To Waive Accrued Interest During Six-Month Moratorium

Finance Minister Urges Banks To Waive Accrued Interest During Six-Month Moratorium

Tasneem Nazari

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Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz is now encouraging banks to consider waiving accrued interest or profit charges during the loan repayment moratorium period.

In a Facebook post, Tengku Zafrul explained that while there are many banks offering a moratorium on loans without any accrued or compounding interest, the move does not apply to all types of loans. 

https://www.facebook.com/tzafrulaziz/posts/131324285183993?__cft__[0]=AZVcYDRa2ObVRJwhiT-ROZT0Gv4fh3tn76zvMQqRKuEolM56BJ9JH27bCf4amLkAftcOLcar2p0adZcGhLCFeLksHTx-JWejivwQADPl1uIQ-5eppV7xXUDrY9NiL4XwU1vWQva89FYumVIX6-AxsieDMAA2bkZp2282rhf0wPP2-Q&__tn__=%2CO%2CP-R

Despite this, he urges all financial institutions involved in the moratorium to consider doing so, mentioning hire purchase and fixed-rate Islamic financing loans in particular.

Taking into account the fact that it is possible to do so, and upon hearing the demands of the people, I am suggesting all financial institutions, in particular those involved in this moratorium, to consider waiving accrued interest or profit for hire purchase loans and fixed-rate Islamic financing loans during the six month moratorium.

Tengku Datuk Seri Zafrul Tengku Abdul Aziz

He also added that his ministry has initiated proactive measures to solve this kerfuffle by engaging Bank Negara and banks to make the “right decision according to the needs of the people”.

His post comes after the recent issues surrounding the moratorium where Bank Negara had initially announced that the moratorium on loans would happen automatically.

We refer to our statements on the moratorium measure issued on 25 March 2020 and on additional steps to operationalise…

Posted by Bank Negara Malaysia | Central Bank of Malaysia (Official) on Thursday, April 30, 2020

However, on 30 April the central bank made a u-turn on its decision saying that hire purchase and fixed-rate Islamic financing loans required additional documentation to give the moratorium “legal effect”.

This caused Malaysians to become confused and anxious on whether or not they would face increased interest rates for the months which had not been paid since the Prime Minister’s Economic Stimulus Package announcement.


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