Budget 2021: Banks To Provide Additional Targeted Repayment Assistance

During the tabling of Budget 2021, the government announced that it would enhance the Targeted Loan Repayment Assistance (TRA). Following the announcement, Bank Negara Malaysia has also released additional details on these measures.

Under the enhanced TRA, additional repayment assistance will be rolled out to:

• B40 individuals who are recipients of the Bantuan Sara Hidup (BSH)/Bantuan Prihatin Rakyat (BPR)
• Microenterprises for facilities with approved amounts of up to RM150,000

Borrowers in these categories can request to defer their monthly instalments for three months, or reduce it by 50% for six months.

This assistance will be available to eligible borrowers between November 23, 2020 and June 30, 2021.

Which facilities are eligible?

• It covers facilities that were approved before October 1, 2020
• These facilities should not be in arrears for more than 90 days.

How do you apply for the enhanced Targeted Loan Repayment Assistance (TRA)?

To apply for TRA, eligible borrowers need to confirm their repayment option with their bank. Additional documentation is not required, unless in the case of hire purchase loans and fixed-rate Islamic financing.

Other enhancements

According to BNM, it has also been working with the banking industry to deliver these enhancements:

1. Simpler documentation. For registered M40 BPN recipients, and whose household incomes have been reduced due to the pandemic, banks will accept requests from borrowers for a reduction in monthly instalments based on the borrowers’ self-declaration of income.
2. Dedicated helpdesk. Microenterprises will be able to request repayment assistance through a dedicated Agensi Kaunseling dan Pengurusan Kredit (AKPK) Micro Enterprise Helpdesk starting November 9. The virtual helpdesk, which will provide free financial advice, can be accessed at www.akpk.org.my/microhelpdesk.
3. Assessment of borrowers’ overall income. Bank processes will be streamlined to take into account a borrower’s income, as well as how their spouse’s income has been affected by the pandemic – this is to get a more holistic assessment of a borrower’s financial situation.

BNM adds that for those facing financial difficulties during this pandemic, repayment assistance remains available to all income groups or SMEs who need assistance. For borrowers who can afford to do so, it will make sense to resume paying down your debts, as you’ll avoid the accrual of extra interest charges that you’ll need to pay off in the future.

For more information about the TRA, visit Bank Negara Malaysia.