KUALA LUMPUR: RHB Banking Group (RHB) has become the first local bank to announce that it will not be compounding interest during the six-month moratorium period after two foreign banks, HSBC and OCB announced this yesterday.
RHB said this would be applicable to its retail and small and medium enterprise (SME) customers and would take effect from April 2020.
For Islamic financing, RHB will continue to observe the principle of no compounding of profit.
“These measures will help to ease the cash flow of individuals and SMEs and will provide the much needed breathing space for customers to re-assess their financial positions, particularly those directly affected by Covid-19.
“The moratorium will apply automatically to all RHB Bank and RHB Islamic retail and SME customers, with the exception of loans/financing facilities that are in arrears exceeding 90 days as at April, 2020,” it said.
For the additional benefits, the bank said interest for all retail and SME banking facilities would not be compounded during the moratorium period and instalment payment amounts will remain unchanged upon the lifting of the moratorium.
For credit card facilities, the bank said customers may request to convert the outstanding balances into a three-year term loan with reduced interest rates.
RHB Banking Group managing director Datuk Khairussaleh Ramli said these additional measures introduced by Bank Negara Malaysia in partnership with the banking industry provides critical relief to ease the financial burden of individuals and businesses, particularly the SMEs, during this extremely challenging period.
“Further details on the repayment deferment and restructuring has been made available on our corporate website,” he said.
Source : https://new.nst.com.my/business/2020/03/578584/rhb-first-local-bank-waive-compound-interest-during-moratorium