Bank Negara announces automatic 6-month moratorium on all bank loans

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KUALA LUMPUR (March 24) — Bank Negara Malaysia has ordered an automatic six-month moratorium on loan repayments will be granted to individuals, small and medium enterprises (SMEs), including mortgages and hire-purchases.

This is part of the central bank’s new measures to relieve the burden on businesses and households that are expected to be affected by the Covid-19 outbreak.

The central bank has written to the commercial bank to inform them of the new measure that will last for six months. However, the loan and interest repayments accrued during the six months will not be waived.

6-month Automatic Moratorium on All Loans

In a letter to the heads of financial institutions today, Bank Negara said the automatic moratorium will be effective from April 1.

“Banking institutions should provide individuals and SME borrowers with adequate information on how the suspended loan/financing repayments/payments will be treated during the moratorium period,” the central bank said.

The automatic moratorium is applicable to ringgit-denominated loans or financing that are not in arrears exceeding 90 days as at April 1, 2020.

For outstanding credit card balances, Bank Negara said customers should be offered the option to convert the outstanding balances into term-loan of not more than three years.

“For corporate borrowers/customers, banking institutions are strongly encouraged to facilitate requests for a moratorium on loan/financing repayment/payment in a way that will enable viable corporations to preserve jobs and swiftly resume economic activities when conditions stabilise and improve.

“This may also include the appropriate consideration of additional financing to support immediate cashflows and the rescheduling and restructuring of existing facilities to allow reasonable time for businesses to fully recover from current disruptions,”