Agrobank takes the lead in waiving additional profit charge on fixed-rate financing
03 May 2020, 02:05 pm
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KUALA LUMPUR (May 3): While the heated debate on whether banks should charge additional interest on deferred payments for hire-purchase loans continues, Agrobank announced today that it will not impose any additional profit charges on fixed-rate financing for all eligible individual and small and medium enterprise (SME) customers during the six-month automatic moratorium period.

“Agrobank is committed to relieving our customers’ distress during these trying times. Therefore, for our Fixed Rate financing customers especially the micro financing customers, there would be no change in the current amount of outstanding and profits borne by our customers,” said the bank’s covering president and chief executive officer Khadijah Iskandar. 

In a statement issued today, Khadijah explained that the bank’s customers will pay the same monthly repayment amount from October 2020 onwards, but the financing tenure will be extended by six months to accommodate the six-month grace period during the automatic moratorium.

The interest waiver is granted on the grounds of providing the bank’s customers further relief from financing obligations and help them weather other challenges they may be facing, said the development financial institution, which is under the purview of the Minister of Finance Inc. 

“The Covid-19 pandemic is an unfortunate situation which has affected businesses including those in the agriculture industry, particularly small and micro businesses. This move will benefit many of our micro financing customers. Agrobank is committed to support our customers in strengthening their business during this trying time,” Khadijah commented.

The statement came two days after Bank Negara Malaysia clarified that fixed-rate Islamic financing may come with additional profit charges after the six-month moratorium that is effective from April 1 to Sept 30 this year.

Agrobank noted that the payment deferment is still automatic for its customers and no additional steps are required for the customers to be entitled to the automatic moratorium facility.

However, customers who do not wish to take up the moratorium can still choose to do so at this time by filling up a form on www.agrobank.com.my/no-mora and resuming their scheduled payments based on the terms of their existing agreements, the statement said.

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