Malaysia’s banks will offer broader loan deferrals that will involve 100 billion ringgit ($23 billion) of funds as the country seeks more ways to soften the pandemic’s impact on its economy.
Banks will offer six-month deferrals for all loans held by individuals and small businesses and let people convert their credit card debt into a three-year term loan, the central bank said in a statement on Wednesday. Corporate borrowers will be allowed to defer or restructure their borrowings in order to protect jobs and resume activities once the situation improves, according to the statement.
The measure is the latest in a series of stimulus steps unveiled by Malaysia, which has imposed sweeping restrictions on movement to curb Southeast Asia’s highest number of coronavirus infections.
Banks can draw down capital conservation buffer of 2.5%, operate below minimum liquidity coverage of 100% and use regulatory reserves set aside during times of strong loan growth.
Central bank to lower minimum Net Stable Funding Ratio to 80%, from 100%, when it’s implemented on July 1.
The government is set to announce a more comprehensive package on March 30, a day before the current lockdown is set to end. That will follow billion-dollar measures rolled out as early as February to help the economy, including lowered minimum pension contributions and discounts to electricity tariffs.