Alliance Bank: No compounding interest on loans during moratorium

The bank said credit card holders may also convert their outstanding balances into a three-year term loan tenure at an effective interest rate of 13.0 per cent per annum. — Reuters pic
The bank said credit card holders may also convert their outstanding balances into a three-year term loan tenure at an effective interest rate of 13.0 per cent per annum. — Reuters pic

KUALA LUMPUR, March 27 — Alliance Bank Malaysia Bhd has announced that all individual and small and medium enterprise (SME) customers will be automatically enrolled for the six-month moratorium on loan/financing repayments from April 1 to September 30, 2020.

In a statement today, group chief executive officer Joel Kornreich said Bank Negara Malaysia’s announcement on the moratorium has provided clear relief to both businesses and consumers who have existing financing and are facing short-term cash flow constraints.

“Following BNM’s announcement, we are pleased to announce that interest on conventional loans will not be compounded during the moratorium period.

“This is to help alleviate the financial burden of our individual customers and SME clients during the moratorium period,” said Kornreich.

The bank noted that in accordance with Shariah principles, the profit for Islamic financing is not compounded but during the six-month moratorium period, the interest/profit on the deferred loan/financing repayments will continue to accrue.

The bank said credit card holders may also convert their outstanding balances into a three-year term loan tenure at an effective interest rate of 13.0 per cent per annum.

Alliance Bank said individual customers and SME clients with loans/financing who wish to opt out of the automatic six-month moratorium may do so by replying to the SMS notification sent by the bank by March 30, 2020.

The bank said its relationship managers have also been actively engaging with its corporate and commercial clients during this time to provide moratorium and other loan restructuring solutions.

It said to date it has approved financing of over RM230 million to affected businesses and consumers under several financial relief initiatives, including the Covid-19 Special Financing Facility for SMEs. — Bernama

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