The Association of Banks in Malaysia (ABM) confirmed today that its member banks will be reaching out to their respective hire purchase (HP) customers to notify them of the procedures needed to effect the moratorium on their loans.
This follows Bank Negara Malaysia’s (BNM) statement earlier in the day requiring banking institutions to take appropriate steps to ensure that borrowers or customers are provided with clear information on the process and changes to terms of their agreements.
Additionally, the ABM said, HP customers who wish to take up the moratorium but have yet to do so are now required to formally confirm this upon receipt of communications from their banks.
“HP customers, who have since March 25, 2020 already notified their banks of their choice to continue paying their existing monthly instalments, i.e. not to take up the six-month moratorium from April 1 to Sept 30, 2020, do not have to take any further action to restate their decision,” the ABM said in a statement today.
HP customers who choose to take up the moratorium will have the option to pay the accumulated six months’ deferred instalments together with their October instalment without being charged any additional interest.
They also have the option to continue the repayment of these instalments post October through an extension of six months in the repayment period after the original maturity date. In this case, interest based on the contractual rate will be charged on the amount of deferred instalments that remains outstanding until the instalments are fully repaid, which should be by the end of the extended six-month tenure.
HP customers who do not formally confirm their acceptance of the moratorium upon receipt of notification from their banks will be considered as not taking up the moratorium. Therefore, these HP customers must continue to pay their monthly instalments as usual according to their original schedule, said the ABM.
“However, our member banks will not impose any additional interest charges or late payment fees for instalments that remain outstanding for April and May 2020 by HP customers who had deferred their monthly instalment payments, provided that payments for April, May and June 2020 are made no later than June 30, 2020. If the said payments are not made by June 30, 2020, the accounts will go in arrears and late payment charges will start accruing from July 2020 onwards,” it said.
The ABM said its member banks will communicate with impacted customers on the exact procedures they will need to follow to take up the moratorium as well as the instalment payment options available to them once the six-month moratorium is over.