FLEXIBILITIES provided under the targeted extension of the loan moratorium and repayment will not reflect on borrowers’ Central Credit Reference Information System (CCRIS) report, Bank Negara Malaysia (BNM) said today.

The CCRIS report refers to an individual or company’s credit information, which is an important element for approval of financial facilities.

“To obtain these flexibilities, borrowers need to apply directly to their respective banks beginning August 7, 2020. BNM has communicated to the banks to deliver a simplified application and documentation process for borrowers,” the central bank said in a statement.

BNM said in recognition of these exceptional circumstances, the flexibilities provided to borrowers during this period will not appear in the CCRIS reports of borrowers.

The central bank said borrowers with loans from multiple banks can refer to one-stop centres such as the Credit Counselling and Debt Management Agency (AKPK) for individuals and the Small Debt Resolution Scheme (SDRS) for SMEs to work out the appropriate payment packages.

The central bank said this after Prime Minister Muhyiddin Yassin announced targeted loan moratorium extension and repayment flexibility for individuals and SMEs who continue to be affected by Covid-19.

However, BNM also advised borrowers who have the means to service their debt to start repaying as it will reduce their overall debt and borrowing cost.

It added that banks are ready to assist borrowers affected by Covid-19 with their repayment plans and other arrangements appropriate to their specific circumstances.

“Ahead of the blanket moratorium ending on September 30, BNM has been working closely with banks to ensure that assistance continues to be provided to borrowers affected by COVID-19, “it said in the statement.

“The more targeted approach to assist individual and SME borrowers is in line with the easing of movement controls since early May. Businesses in almost all sectors have since resumed operations, and the vast majority of Malaysians have returned to work,” it said.

BNM said many borrowers who initially opted for the moratorium have started to resume loan repayments.

However, it said that income and cash flow challenges have persisted for some, especially those who have become unemployed and saw a reduction in income.

BNM added that the targeted approach will ensure that financial resources and attention are prioritised where it is needed the most.

The central bank will also continue to focus efforts to ensure that the banking system also continues to carry out its intermediation function effectively in support of economic recovery

As announced by the prime minister earlier, the moratorium will be extended by another three months for those who lost their jobs this year and have yet to get a new one.

Banks will decide on granting them further extension depending on their situation and ability to service their debt after the end of the three-month extension.

It said those who are still employed but had their pay cut will get their monthly payments reduced, proportionate to their income.

The aid will be in effect for at least six months, and extension will be granted depending on the current income of the individual.

Banks are also committed to providing targeted aid for individual borrowers, small and medium enterprises (SMEs), traders and the self-employed individuals affected by the pandemic.

This includes servicing only interest payments for a stipulated period, extending the payback period for financial facilities, and other forms of exemption until the borrower’s financial footing is stable.

For hire-purchase loans, banks will also offer installment payment schedules in line with the Hire Purchase Act. – July 29, 2020.