OCBC Malaysia has stated that the interest for its mortgages and SME loans during the six-month moratorium mandated by Bank Negara Malaysia (BNM) will not be compounded.
“OCBC Bank (Malaysia) Berhad and its subsidiary OCBC Al-Amin Bank Berhad will not be compounding interest and profit respectively for its mortgages and SME loans/financing during the 6-month moratorium announced recently by Bank Negara,” said OCBC in a statement. “This means that customers will not be charged any interest on the interest that arises from the moratorium period.”
“These are both trying and uncertain times. So we are seeking to alleviate our
customers’ burdens as much as we can,” said OCBC Bank CEO Dato’ Ong Eng Bin. “Although compounding might be allowed for, we have elected not to do so in light of the pressing circumstances.”
BNM has stated in its FAQ that interest would still continue to accrue and compound for loans during the deferment period, so any banks that decide to declare non-compounding interest are making that decision themselves. HSBC was the first bank to release a statement saying that it will not be compounding interest during the moratorium period this morning.
Yesterday, BNM announced that all banks and development financial institutions would offer an automatic deferment of six months for loan and financing repayments to SME and individuals, with effect from 1 April 2020.