Banks agree to restructure housing loan payment

The government has been discussing with banks in Malaysia on restructuring the payment plans for housing loans in order to help reduce the burden of borrowers.

Second Finance Minister Tan Sri Nor Mohamed Yakcop said the banks welcomed the government’s suggestion and that he had been informed by the banks offering housing loans of their move to restructure their housing loans.

The lower repayment on loans will ease the burden of the borrowers, he said at the winding up session of the debate on the mid-term review of the Ninth Malaysia Plan at Dewan Rakyat today.

On Bank Negara Malaysia (BNM)’s decision to allow banks issuing credit cards to stop the interest free period payment on the purchase of retail items, Nor Mohamed said BNM was introducing a tier pricing structure to encourage credit card users to be more careful and smart in their spending.

He said three types of tier pricing structures had been introduced namely a mechanism which allows credit card holders to enjoy a lower finance charge of 15 per cent a year if they are able to make all their credit card payments on time, while the second tier charges 17 per cent if the users pay 10 months out of the 12 months on time and under the third tier 18 per cent will be charged if the credit card holder frequently fails to pay back on time.

“This tier pricing structure will help to reduce the cost of credit card usage compared with the previous system which charged 18 per cent,” he said.

With this system, Nor Mohamed said the previous offer of 20 days repayment period without interest charge enjoyed by all credit card holders automatically without taking into account the monthly credit card payment, will be discontinued.

However, he said he had meetings with all the banks and had asked them to review the matter and that they had agreed to reviewing it.

By Bernama