Apparently there is a leak of the letter sent by BNM to the chief executives of Malaysian banks. I am just reposting what the person above has posted. The leak is not from me. The real thing has 6-pages if I am not mistaken

Never happened before.

BNM's FAQ on the moratorium

This post has been edited by wild_card_my: Mar 25 2020, 03:22 PM

based on the document, it would be automatic. But best if you get information from your respective banks. Right now, there is nothing, but I am sure they are working to get things done.

What are you talking about that interests cannot be accrued for islamic financing? Fine you are right, they don't call it interest, they call it "profit"

Okay let me be clear about this: "Profits will be accrued and you would end up having to pay for it once the moratorium is over"

And when you said "profit", you meant the ASB distribution correct? As far as I understand, since your certificates are still being held by the bank (and you get to benefit from the certificate), you would still be paid distribution for the periods of the moratorium

At last, I would still recommend that you wait for the notification from your respective banks

That is a question I should be able to answer, but since the banks are not telling me anything, I also dont know

But its not free money. You would still have to pay for the interests that have accrued over the next six (6) months

4.40% for 40 years is available now. Most of my clients would opt for the longest tenure as well. No insurance required

CIMB memang strict when it comes to employment, industry, and verification. If it is not too late, you can always opt for 4.40% for 35 years. Your call.

I have about 150 RHB customers. A good number of them from LYN. Good news for you guys

---

RHB first local bank to waive compound of interest or profit during six-month moratorium

KUALA LUMPUR (March 27): RHB Banking Group became the first local bank to announce that it will not be compounding interest for its retail and small and medium enterprise (SME) customers during the six-month moratorium period recently announced by Bank Negara Malaysia (BNM).

Two foreign banks here — HSBC and OCBC — have announced this as well recently.

The six-month moratorium will take effect from April 1, 2020. These measures will help to ease the cash flow of individuals and SMEs and will provide the much needed breathing space for customers to re-assess their financial positions, particularly those directly affected by Covid-19, RHB Banking Group said in a statement.

The moratorium will apply automatically to all RHB Bank and RHB Islamic Retail and SME customers, with the exception of loans/financing facilities that are in arrears exceeding 90 days as at April 1, 2020.

For the additional benefits, the bank said interest for all retail and SME banking facilities will not be compounded during the moratorium period and instalment payment amounts will remain unchanged upon the lifting of the moratorium.

For credit card facilities, the group said customers may request to convert the outstanding balances into a three-year term loan with reduced interest rates.

RHB Banking Group managing director Datuk Khairussaleh Ramli said 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.

“Further details on the repayment deferment and restructuring has been made available on our corporate website,” he said.

At 10.08am, RHB shares gained 0.4% or 2 sen to RM4.97, valuing the group at RM19.93 billion.

This post has been edited by wild_card_my: Mar 27 2020, 12:19 PM

I can't make head or tail on MBB. It says interest will not compound. Do they mean it will be accrued, but not compound?

Because when it comes to RHB (as per my post above), they say the installment will remain the same after the 6 months period, only that the tenure would be extended another 6 months, which makes sense.

People on MBB FB is also asking the same question as I do. Confusion starts because MBB announcement did not mention anything about the installment changing or remaining the same

I think Maybank's is akin to the highlighted parts below. They will still accrue interest (on a daily-rest basis, for the 6-months period), but will not compound the interest on the accrued interest

---

OCBC: No compound of interest or profit during 6-month moratorium

KUALA LUMPUR (March 26): OCBC Bank (Malaysia) Bhd said it will not be compounding interest and profit on mortgages and loans for small and medium enterprises (SMES) during the six-month moratorium period.

This means that these customers will not be charged any interest on the interest that arises from the moratorium period, it said in a statement.

This would apply to both mortgage and SME customers.

“These are both trying and uncertain times. So we are seeking to alleviate our customers’ burdens as much as we can. Although compounding might be allowed for, we have elected not to do so in light of the pressing circumstances.

“We hope our customers will continue to exercise prudence in their spending during these challenging times,” said OCBC Bank chief executive officer Datuk Ong Eng Bin.

Yesterday, Bank Negara Malaysia announced relief measures in support of efforts by banking institutions to assist individuals, SMEs and corporations to manage the impact of the Covid-19 outbreak, including a six-month deferment of all loan/financing repayments beginning next month.

I am still trying to figure the bolded parts. Even the bankers and my managers friends are not too clear about this. For MBB and OCBC, the announce is quite clear, that the interests will accrue, but they wont accrue interests on the accrued interest

RHB has been sending my clients to pay on the 31st March, then likely you won't have to pay onwards. Unfortunately my function is up to the sales side, I have the same access to information as to any RHB (or other banks) customers regarding this.

My theory: they want you to settle this one month first, so they have some liquidity of sorts.. then they brace for the 6-months moratorium, which they are not allowed to go against anyway (directive from BNM). any installments due within next month is being fast forwarded to 31st March

So help them and pay la hehe. then holiday from paying for 6-months. Interests will accrue, but you would have to pay for them anyway if you paid your installment. We dont know what will happen after 6-months. BEtter to keep the cash (that would otherwise be used to pay the installment) in hand.

Yeah ASBF memang confirm included in this moratorium

I am not privy about MBB's method to do away with the moratorium. For RHB, all you have to do is continue paying machiem biasa, then you would not benefit from the moratorium at all

As for the accruing interest, it is safe to say that for ALL BANKS, interests will accrue for your ASBF/Mortgage. The recent announcement has been confusing but as I have discussed it with my circles, the banks will not apply compound interests on the accrued interest, that is all.

meaning if you would be accruing RM1,000 a month in interests, after 6 months, the accrued interest is RM6,000. Normally, any amount that you owe the bank would be charged interest, including your loan balance + the accrued interest on a daily basis (calculated monthly). Assume your interest is 5%.

1st month accrued interest RM1000
2nd month accrued interest RM2,000 + (5% of RM1,000 = RM50)
3rd month accrued interest RM3,000 + RM50 + (5% of RM2050 = RM102.50)
4th month accrued interest RM4,000 + RM50 + RM102.50 + (5% of RM3,152.5)
5th...
6th...

Ok I am bloody tired, but you got the idea. Do this until the 6th month. The parts bolded are the process of "compounding the accrued interest" Now the banks are all saying that they will NOT compound the interests. But the accrued interest will still happen.

to both islamic financing (profit) and conventional loan (interest)

You are right, people are getting confused, even myself. I had to bring this matter to my circles for a discussion. But was my explanation above clear? Should I improve?

buggie got it right. Different banks have different ways for you to settle the accrued interests

But here are the general ways:

1. It will be capitalized into your loan , so your installment will increase while tenure will remain the same (plus 6 m)

2. You will pay for it in lump sum at the end of the moratorium (installment and tenure remain the same plus 6m)

3. It will be paid at the end of the tenure, but it will be compounded for forever long your tenure is left (tenure increased, installment remain the same)

1. Sure mate. You have to pay everything that is due to them. The accrued interest is something you definitely have to pay, by hook or by crook - i.e. by capitalising it into the loan thus increasing your loan balance (which you have to settle once you need to cancel the loan) or by paying it in lump sum which I have explained above.

2. Ah, that is the point of the moratorium. That you do not have to pay the principal of the loan (loan balance) back to the bank. It helps you a little bit. If you want to pay the principal, and since you need to pay the interest anyway, then just pay the installment as normal lah! This moratorium has the purpose of easing you M40 and some of us T20 with cash-flow in these dire times. Cash-flow is king, it makes or breaks you as a person and as an enterprise. Essentially the moratorium allows your tenure to be extended, so you would not be too fcuked up with loan repayments/installments

3. If you have already started rolling, wouldn't you already have cash in hand from the distribution in Jan 2020 that you used to pay off the loans for the next 12 months? If yes, then the point is moot. If you are just starting out, then I would say to take the moratorium, and see how shit goes in Malaysia six (6) months from today. If everything is fine and dandy, then you can go ahead and pay the accrued interests in lump sum if you do not want your installment to be increased over the remaining of your tenure; in the event that it is NOT fine and dandy, at least you still have money that you have not used to pay the installment, to buy food during an era of hyper-inflation or something

I should write an ebook.

The ELI5 and more elaborated was posted below. In short, if you think that you would need the cash in the next 6 months due to uncertainty, don't pay the installments and keep the cash. Suppose after 6 months you turn out fine, just use the money saved (from not paying the 6-months installment) to pay the accrued interest in lump sum. In this situation, since you have not been paying the capital, your accrued interests would still be a little higher than if you had continued paying the installment as usual. This is because as you pay your installment, you are also paying the capital to reduce the loan balance. As we know, the accrued interests are calculated based on the loan balance, so each month the accrued interests would be lower than the previous month - thus we refer this as "reducing balance interest" calculation

But I still believe that if you are uncertain about your future for the next 6 months, it is not wrong to take up the moratorium offer.

https://forum.lowyat.net/index.php?showtopi...post&p=96058278


Just keep in mind that you would still have to pay the accrued interest over the 6-months moratorium at the end of the the program.

Interest is always accrued, but not sure about the compounding of the accrued interests. They have always been quite slow about the announcements, compared to all the other banks

This post has been edited by wild_card_my: Mar 28 2020, 04:18 PM

In general, yet. It doesn't require clients to pay the 0.5% (of the loan amount) as stamp duty. It only has endorsement fees, which is RM50. It can also go all the way to 40 years. Best option if you ask me