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The Association Of Banks In Malaysia Lauds Move To Facilitate A One-Year Deferment of Housing Loans For Retrenched Workers
Kuala Lumpur, March 10, 2009 – The Association of Banks in Malaysia fully supports its member banks’ agreement to defer the repayment of housing loans of retrenched workers for one year.
The government’s incentive of withholding taxation of the interest income related to such deferment until such time interest is received is also welcomed.
ABM is confident the deferment repayment plan will help reduce the financial strain on these affected wage earners as Malaysia is faced with an extremely challenging economic environment.
ABM will work closely with the individual member banks to make the relevant operational changes to put into effect the deferment of the repayment of housing loans for the affected group as soon as possible.
The latest move is just one of a series of steps taken by member banks this year to alleviate the burden on the banking public in the midst of the current slowdown as well as put more disposable income into the public’s pockets.
Commercial banks have already pro-actively announced steps to reduce the monthly loan repayment instalments for facilities with interest rates pegged to the relevant base lending rate (BLR) with the agreement of their customers, to help borrowers in the current challenging environment.
The reduction in the monthly loan repayment instalments is intended to give added impetus to the lowering of the banks’ respective BLR in line with the overnight policy rate (OPR) cut.
With the lowering of their BLR, banks and their customers have the option of either (1) retaining the tenure of the loan and reducing the monthly loan repayment instalments, or (2) shortening the tenure of the loan whilst maintaining the amount of their customers’ monthly loan repayment instalments.
Credit card users will also enjoy lower interest rates effective March 31st 2009 after commercial banks reduced rates and charges across the multi-tiered rates system.
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