Pemulih: Report banks if they charge compound interest/ penalty during moratorium extension

Following the announcement that the government has extended the loan moratorium by another 6 months, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has clarified banks will waive the compounded interest and penalty charges incurred.

The new extension came as part of the new National People’s Well-Being and Economic Recovery Package (Pemulih).

Prime Minister Tan Sri Muhyiddin Yassin announced a 6-month moratorium on loan repayment for individual borrowers across all income brackets.

To be clear, the usual monthly interest that the bank charges on your loan will continue to apply. However, the compound interest that is mentioned here is when a bank would raise the monthly interest as a form of penalty for deferring your payments.

Also read: 6-month moratorium extension and RM 6b fuel subsidy announced in Pemulih aid package

Tengku Zafrul pointed out that the government has already raised the matter with the banks during a virtual meeting and the banks have agreed to the waiver.

For the full clarification, the minister advises all individuals to call up their respective banks as different banks have different ways of operating.

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He also advises the public to report and complain if the banks raise a compound interest or charge a penalty on the moratorium.

Although the moratorium extension is automatic and covers all individuals in all income brackets, the individual will still need to head to a bank to file an application. The application will be immediately approved as there is no need to show them proof of pay reduction or job loss.