Malaysia allows further extension of deferment of bank loan repayments

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - The government on Wednesday (July 29) announced that Malaysians who have lost their jobs or are unable to find jobs will get further extensions to defer repaying their banks loans.

And those who had salary cuts due to the coronavirus pandemic will be allowed to repay their bank loans in smaller amounts, depending on the severity of the pay cuts, Prime Minister Muhyiddin Yassin said.

The extensions of the moratorium on bank loans was much anticipated by Malaysians, who have been badly affected by the pandemic that has thrown people out of work and shut many businesses.

The government in April implemented a six-month repayment moratorium to help the finances of Malaysian households.

The moratorium was to have ended on Sept 30 before Wednesday's announcement of the extension.

Tan Sri Muyiddin said individuals who lost their jobs this year and still haven't got a new job can enjoy the moratorium for another three months, up to Dec 31.

"After three months, the moratorium period can be extended by the banks, depending on the individual's situation," he said in a televised address on Wednesday (July 29).

"For individuals who are employed but have had their wages cut, their monthly instalments will be decreased in tandem with their pay cuts.

"For example, for housing and personal loans, the monthly instalments will be lowered in tandem with the salary decrease.

"This will be for a period of at least six months and an extension can be given, subject to the individual's salary at that time."

The premier also said that the banks have committed to implement several measures to help borrowers, both individuals and small and medium-sized entreprises (SMEs).

He said the measures are expected to benefit up to three million individuals and SMEs.

The measures include paying only the interest during a set time frame, extending the duration of the loan to reduce monthly repayments, and other forms of relief - until the borrowers are financially stable.

"I hope this targeted moratorium and bank assistance extension will be able to ease the burden of those affected by the Covid-19 economic fallout, " he said.

PM Muhyiddin said according to the central bank, the moratorium has benefited more than seven million individuals, with a total of RM38.3 billion (S$12.4 billion) repaid up to July 20.

He added that 243,000 SMEs benefited from the moratorium with repayments worth RM20.7 billion during the same period.

Other countries that have introduced various forms of moratorium include Singapore, Indonesia, the Philippines, Thailand, the United Kingdom, Canada, Italy, and the United States.