Maybank has also decided that it will not be compounding interest for loans during the moratorium period. All eligible individual, SME, and non-retail/corporate customers will not be charged compound interest during the six-month repayment deferment period starting 1 April 2020.
The Maybank products that qualify for the automatic moratorium for individual and SME clients include personal, mortgage, ASB, education, and SME loans. For these types of loans, all retail and SME customers do not need to apply as they automatically qualify under BNM’s ruling. They will not be charged compound interest during the moratorium period.
As for Islamic financing facilities under Maybank, profit rates are already not compounded in accordance with Shariah principles. On a related note, fixed-rate hire purchase loans already do not have compounding interest.
In a step further than other banks, Maybank is also offering non-compounding interest to its non-retail and corporate customers. (HSBC and RHB have extended this benefit to retail and SME customers, whereas OCBC has extended it to mortgage and SME customers.) However, as non-retail and corporate customers do not fall under the purview of BNM’s automatic moratorium, they will need to submit the required application for moratorium through their Maybank relationship managers or corporate bankers.
“In these extraordinary times, we believe that all our customers; individuals or businesses, are facing unprecedented challenges,” Maybank said in a statement posted on its Twitter and Facebook pages. “We hope that this additional measure will provide our customers further relief from their financing obligations for this period and help them weather the other challenges they may be facing.”
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. However, according to BNM, banks would still be accruing interest on loans/financing during the deferment period, and that interest would be compounded for conventional loans – although more banks have been coming forward to offer non-compounding interest of their own accord.