RHB Banking Group (RHB) has announced that it will not be compounding interest during the 6-month moratorium laid down by Bank Negara Malaysia (BNM), joining several other Malaysian banks that have declared the move as an additional benefit to its customers.
This is applicable to RHB’s retail and small-medium enterprise (SME) customers during the 6-month repayment moratorium starting 1 April 2020. As for Islamic financing, RHB will continue to observe the principle of no compounding of profit as usual.
On 25 March, 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. 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.
“These additional measures introduced by BNM in partnership with the banking industry provides critical relief to ease the financial burden of individuals and businesses, particularly the SMEs during this extremely challenging period,” said Dato’ Khairussaleh Ramli, group managing director of RHB Banking group.
Other banks who have come forward to declare non-compounding interest for the period of the moratorium include HSBC, which has also extended this measure to all of its retail and SME customers, and OCBC, which will not be compounding interest for its mortgage and SME customers.