The six-month loan repayment moratorium under the RM150 billion Pemulih package announced yesterday by prime minister Tan Sri Muhyiddin Yassin is meant to help borrowers by deferring repayments to a later date, but would not be interest free, according to finance minister Tengku Datuk Seri Zafrul Abdul Aziz.

Speaking to reporters during a virtual briefing earlier today, he said the current moratorium is the same as before, and that the method of repayment – including that of interest charges – will differ in each case and would have to be determined “between the borrowers and banks,” The Star reports.

UPDATE: Story has been updated with the mention that banks have been told to waive compounded interest and late penalty charges.

However, he later added that banks would waive compounded interest and penalty charges for borrowers who take up the moratorium, according to the New Straits Times. He said that the important thing was that the government had managed to get the banks to give the moratorium to everyone, regardless whether they are affected or not. “That moratorium hopefully will help the cashflow of the rakyat,” he added.

Unlike the moratorium approved in the first MCO early last year, the latest moratorium is for everyone, from the B40 segment to the country’s top 20% earners (T20) as well as micro entrepreneurs. There will be no need for proof of pay reduction or job loss, and no documents are required.

Applications will open on July 7, and borrowers just need to apply with the bank and sign the amended loan agreement form. Approval will be automatic for individual borrowers. Small and medium enterprises (SMEs) can also apply, but for companies, it’s subject to review by the banks (not automatic).