23rd October 2020 - 3 min read
Bank Negara Malaysia (BNM) has reassured borrowers, especially those affected by the movement curbs due to the rising Covid-19 cases, that they can still reach out to their banks for loan repayment assistance.
In an interview with Bernama, the deputy governor of BNM, Jessica Chew said that borrowers do not need to worry as the repayment assistance is ongoing and will extend into the following year. “We understand the circumstances and uncertainties could change down the road and people can reach out for assistance anytime,” she said. Even banking customers who reside within enhanced MCO (EMCO) and conditional MCO (CMCO) can do so, by means of online enquiries or phone calls.
“BNM has a dedicated page where borrowers that are in need of repayment assistance can obtain more information. Borrowers can also fill in a form on the website with a few simple information which we can use to arrange call-backs from their banks,” added Chew.
Chew also emphasised that although the automatic moratorium as well as subsequent targeted financial aids are unprecedented, banks are tapping into all available resources to manage the situation. “The banks are very well-positioned to respond to borrowers’ needs. All banks have dedicated resources and re-engineered their processes to review borrowers’ applications,” she said, adding that banks have already started receiving applications for assistance in repayment even before the end of the blanket automatic moratorium on 30 September.
As of 9 October, a total of 640,000 applications for targeted repayment assistance were received, with the approval rate standing at 98%. Of the approved applications, 40% was granted aid in the form of extended moratorium whereas the remaining 60% obtained a reduction in instalments.
Chew also said that banks are better prepared now compared to when the pandemic had hit for the first time as they have already established an infrastructure to help borrowers. “In March this year, when there was a sudden stop in activities across the board, nobody ever thought that such a situation would occur. Under those circumstances, there was a need to provide immediate relief for borrowers. Now, not only is our healthcare system better prepared and ready, so are the banks,” she added.
Chew further stressed that targeted repayment assistance is the best option moving forward as it allows banks to focus their efforts on borrowers who truly need help. Additionally, it clearly shows the loan performance of banks. “There is still so much uncertainty as we don’t know how long this pandemic is going to last, at least until a vaccine is developed. Hence, it is important that resources are conserved and directed to people and businesses who really need it,” she clarified.
On top of that, Chew explained that new lending is crucial in helping Malaysia’s economy to recover, and banks must be comfortable to provide the service. “If resources are deployed elsewhere, it may affect credit flows to sectors which may require financing to resume their business activities. This could, in turn, affect the economy and the pace of economic recovery,” she said.
Subscribe to our exclusive weekly newsletter and we’ll bring you the week’s highlights of financial news, expert tips, guides, and the latest credit card and e-wallet deals.
Stay tuned for what’s to come next in the personal finance world