THE six-month loan moratorium announced by the Putrajaya yesterday is not applicable to credit card debts, said banking associations.

Instead, debtors have the option to convert credit card debts into a three-year loan with reduced interest or profit rates to help borrowers better manage their debts.

In a statement this evening, the Association of Banks Malaysia (ABM) and the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) said they will be offering a six-month moratorium on the installment of all credit facilities (excluding credit cards).

This is in line with the announcement by Prime Minister Muhyiddin Yassin of the Pemulih package to help Malaysians tide over the current pandemic situation.

ABM has 26 members comprising commercial banks that currently operate in Malaysia while AIBIM has 26 member banks consisting of 11 domestic banks, five development financial institutions and 10 locally incorporated foreign banks

The six-month loan moratorium will be available to individuals across all income groups, micro enterprises and small and medium enterprises (SMEs) affected by the Covid-19 pandemic, the associations said.

The facility is, however, only applicable to loans approved before July 1, and must not have arrears of more than 90 days on the day of request.

“Borrowers or customers who wish to take up this moratorium will need to contact their banks from July 7 onwards,” the associations said, reminding all customers to apply for the moratorium through digital channels and by phone in view of the current lockdown.

The Central Credit Reference Information System records of borrowers who opt for the moratorium will remain unaffected.

Earlier today, Finance Minister Tengku Zafrul Tengku Abdul Aziz said the moratorium is not interest-free.

However, banks will waive the compounded interest and penalty charges incurred during the six-month loan moratorium under Pemulih.

The Pemulih aid package is worth RM150 billion and aims to help businesses and individuals during the lockdown. With the latest package, the government has announced a total of RM520 billion in aid. – June 29, 2021.