14th September 2021 - 2 min read
The Ministry of Finance (MOF) has directed banks to begin working on waiving the interest fee for selected borrowers who have tapped into the ongoing loan moratorium.
“This involves the recipients of the moratorium from the bottom 50% of all Malaysians for a period of three months in the fourth quarter of 2021. All banking institutions have been instructed to work for interest payment exemptions for recipients of the bank loan moratorium immediately,” said the Finance Minister, Tengku Datuk Seri Zafrul Abdul Aziz in a statement. In other words, these borrowers will likely see the interest fees for their loans waived between October to December 2021.
This move came following a Cabinet meeting that took place on 10 September 2021, during which ministers approved a proposal to table amendments to the Temporary Measures for Government Financing (Covid-19) Act 2020. This entails raising the ceiling limit of the Covid-19 Fund from the current RM65 billion to RM110 billion, as well as increasing the statutory limit of federal government debt from 60% to 65% of gross domestic product (GDP).
For context, the government had previously announced a second six-month blanket moratorium for all individual borrowers (B40, M40, T20, and microentrepreneurs) under the PEMULIH package. It is similar to the first blanket moratorium that was offered back in 2020, with Tengku Zafrul confirming that it is not interest free. Compounded interest and penalty charges incurred, meanwhile, are both exempted.
Aside from announcing the waiving of interest fee, the statement from MOF also emphasised that the ministry will strive to accelerate Malaysia’s economic recovery and enhance national resilience through Budget 2022. These will be done through the formulation of business and investment-friendly policies.
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