Banks will still offer repayment assistance, moratorium extension to borrowers – PM, banking associations

Prime minister Tan Sri Muhyiddin Yassin has reiterated that the targeted repayment assistance (TRA) scheme will continue to be made available to those who need it, including those affected by the reinstated movement control order (MCO). This was mentioned during his speech today, where he also announced a new round of aid under the Permai stimulus package, which is worth around RM15 billion.

Muhyiddin also added that for states that were stricken by floods, 15 banks are currently offering the TRA to affected victims. Up until now, more than 1.3 million borrowers have requested for the TRA, with an approval rate of 95% for individuals and 99% for SMEs.

Both the Association of Banks in Malaysia (ABM) and the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) also issued similar statements earlier today, as reported by The Edge.

In terms of mechanics, the TRA hasn’t changed from what was announced previously. Individuals who have lost their jobs in 2020 or 2021 will be able to apply for a payment deferment (aka moratorium) for a period of three months any time on or before June 30, 2021, according to the associations, including those with existing moratoriums.

Meanwhile, those who are still employed but experienced a reduction in income will be able to restructure their loans instead. This can involve a revision of their monthly instalment amount in exchange for an extension of their loan tenure.

However, the exact terms differ from banks to banks, with some offering further deferment as well, so check with your bank to ensure you are properly informed. It was also revealed last year that the TRA scheme covers those in the M40 category, including Bantuan Prihatin National (BPN) recipients, although these individuals will need to make a self-declaration that their income has been affected to receive assistance.

Specific to those in the B40 category, including Bantuan Sara Hidup (BSH) or Bantuan Prihatin Rakyat (BPR) recipients, and SMEs with approved loan amounts of up to RM150,000, they may request a three-month repayment deferment or a reduction of the instalment amount by half (50%) for six months.

Both associations also noted that the TRA for B40, M40 and SMEs are applicable for loans/financing approved before October 1, 2020, and are not in arrears for more than 90 days on the date the request for the TRA is submitted to the bank.

All other borrowers facing difficulties in repayment are welcomed to contact their respective banks to negotiate suitable assistance, depending on their situation. Any assistance approved during this period will not appear in the borrowers’ CCRIS records.

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