Alliance Bank has announced that interest on its conventional loans for individual and SME customers will not be compounded during the moratorium period. This makes Alliance the latest bank to come forward and declare non-compounding interest during the six-month moratorium as an additional benefit to its customers.
“Following BNM’s announcement, we are pleased to announce that interest on conventional loans will not be compounded during the moratorium period,” said Joel Kornreich, group CEO of Alliance Bank. “This is to help alleviate the financial burden of our individual customers and SME clients during the moratorium period.”
In accordance with shariah principals, the profit for Islamic financing products will not be compounded.
On 25 March, BNM announced that all banks and development financial institutions would offer an automatic 6-month moratorium for loan and financing repayments to SME and individuals. BNM also stated that banks would still be accruing interest on loans/financing during the deferment period, and that interest would be compounded for conventional loans. However, several banks including HSBC, RHB, and Maybank have come forward to offer non-compounding interest of their own accord.
Alllance Bank individual and SME customers should also note that they must reply to the SMS notification sent by the bank by 30 March 2020 if they wish to opt out of the automatic 6-month moratorium.
(Source: Alliance Bank)