{"id":17678,"date":"2020-05-01T02:13:19","date_gmt":"2020-04-30T18:13:19","guid":{"rendered":"https:\/\/www.carsome.my\/news\/?p=17678"},"modified":"2025-06-25T10:39:39","modified_gmt":"2025-06-25T02:39:39","slug":"6-mth-moratorium-what-should-you-do","status":"publish","type":"post","link":"https:\/\/www.carsome.my\/news\/item\/6-mth-moratorium-what-should-you-do","title":{"rendered":"How does the BNM moratorium change impact me and what should I do?"},"content":{"rendered":"

This post is written by Aaron Kee, Chief of Staff at Carsome and was originally published on LinkedIn.<\/em><\/p>\n

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A little over a month ago, the Central Bank of Malaysia (BNM) announced something unprecedented – it ordered all banks in Malaysia to grant an automatic six-month moratorium (deferment) of all loans\/financing repayments from 1 April 2020. This forms part of the broader Covid-19 stimulus package designed to cushion the economic fallout from the lockdown measures announced by the government since mid-March 2020.<\/p>\n

It was a timely move, given that Malaysia has one of the highest household debt-to-GDP ratio (over 82%), which means most people stand to benefit immediately. All borrowers were given a 6-month period to get their finances right. While everyone lauded the move (me included), one has to wonder how would this impact the financial institutions?<\/p>\n

As starters, banks will not have any cash inflow from loan repayments during the period, which causes a significant liquidity squeeze as loan growth (cash outflow) continues while operating expenses like payroll, rental and other costs have to be paid. It’s something like no salary for the banks for 6 months, which is bad. I suppose down the line someone actually realised that the potential systemic risk as part of the broader liquidity selloff is too big to ignore. Hence, effective from tomorrow, the moratorium now comes with a few less-than-friendly T&Cs.<\/p>\n

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So, what changed?<\/strong><\/p>\n

First thing first, the moratorium is no longer automatic. That is, if you wish to continue the moratorium, you MUST NOTIFY<\/strong> the bank. If you do not notify, the banks will bill you like usual. But this is only applicable for hire purchase (cars) loans, and Islamic financing, due to the fact that both are fixed-rate instruments, unlike your housing loans which are mostly variable.<\/p>\n

Secondly, if you wish to continue the moratorium (after notifying the banks), you will get 2 options:<\/p>\n