Malaysia: Bank Negara Malaysia

Malaysia Apr 10, 2020

IMPORTANT - Note from Editor:
The following is a compilation of initiatives by Bank Negara Malaysia. All information below is directly retrieved from the BNM website, with certain sections summarised by the Reapra team for brevity. To view the complete description of each measure, please refer to their respective links.

To ensure relevance for our readers, we are only providing measures relating to support for businesses. For the full listing of measures, please head over to the BNM website.

Key source: BNM website


Bank Negara Malaysia (the Bank) has announced a number of regulatory and supervisory measures in support of efforts by banking institutions to assist individuals, small and medium-sized enterprises (SMEs) and corporations to manage the impact of the Covid-19 outbreak.

  • Deferment and Restructuring of Loans/Financing Facilities
  • Ample Liquidity Conditions
  • Additional Supervisory and Prudential Measures
  • Enhancing the BNM's Fund for SMEs
  • Programme to Support the B40 Segment in Generating Sustainable Income and Achieving Financial Resilience (iTEKAD)
  • Relief Measures for Affected Policyholders and Takaful Participants

Deferment and Restructuring of Loans/Financing Facilities

  1. Loans/financing to individuals and SMEs
    • All loan/financing repayments will be deferred for a period of 6 months, with effect from 1 April 2020.
    • Applicable to performing loans, denominated in Malaysian Ringgit, that have not been in arrears for more than 90 days as at 1 April 2020.
  2. Loans/financing to corporations
    • Banking institutions will also facilitate requests by corporations to defer or restructure their loans/financing repayments in a way that will enable viable corporations to preserve jobs and swiftly resume economic activities when conditions improve.

Ample Liquidity Conditions


Additional Supervisory and Prudential Measures

To enable banking institutions to support their customers and proactively manage risks arising from current developments, the Bank has reviewed its planned regulatory and supervisory activities in 2020 to ease compliance and operational burdens on banking institutions. As part of this review, policy and supervisory initiatives will be refocused on monitoring and responding to risk developments and ensuring that banking institutions continue to be a source of strength for the Malaysian economy.

• Banking institutions will be allowed to draw down on capital and liquidity buffers which were built up over the years to support lending activities.

• The implementation of the Net Stable Funding Ratio will proceed as scheduled on 1 July 2020. However, the minimum NSFR will be lowered to 80% and banking institutions will be required to comply with the requirement of 100% from 30 September 2021.

• The Bank will be extending the timeline for all ongoing consultations on published discussion papers and exposure drafts to 30 June 2020 and beyond. Flexibilities will also be provided for banking institutions to meet timelines for regulatory submissions to take into account the efforts being undertaken by the Government to contain the spread of Covid-19.


Enhancing the BNM's Fund for SMEs (the Fund)

Aimed at assisting Malaysian SMEs in sustaining business operations during the COVID-19 period, as well as to safeguard jobs and support economic growth, BNM is enhancing its existing financing facilities, and increasing the allocation of the facilities by an additional RM4.0 billion to RM 13.1 billion.

The enhancements under the Fund entails the following:

  1. Special Relief Fund (SRF)
    • Increase in the allocation of the SRF from RM2 billion to RM5 billion
    • The maximum financing rate is now lowered from 3.75% p.a. to 3.50% p.a.
    • Enhanced SRF available until 31 December 2020.
  2. All Economic Sectors (AES) Facility
    • Increase in the allocation of the AES from RM5.8 billion to RM6.8 billion
    • The maximum financing rate is now lowered from 8% p.a. to 7% p.a.
  3. Automation and Digitalisation Facility (ADF)
    • Allocation of RM300 million (as part of AES)
    • Financing rate of up to 4% p.a. (inclusive of any guarantee fee)
  4. Agrofood Facility (AF)
    • Allocation of RM1 billion
    • Financing rate of up to 3.75% p.a. (inclusive of any guarantee fee)
  5. Micro Enterprises Facility (MEF)
    • Allocation of RM300 million
    • Financing rate to be determined by participating financial institutions (PFIs)

Programme to Support the B40 Segment in Generating Sustainable Income and Achieving Financial Resilience (iTEKAD)

To further facilitate access to funding and help build entrepreneurship capability among B40 micro-entrepreneurs, a social finance programme will be introduced by participating Islamic banks in collaboration with some State Islamic Religious Councils (SIRCs) and implementation partners.

Social finance (zakat, waqf and sadaqah) offers significant potential to facilitate distribution of funds in a more balanced and inclusive manner. The programme is designed to mobilise social finance contributions towards providing seed capital that is packaged with microfinancing for eligible micro-entrepreneurs to start and grow business to generate sustainable income.

Find out more here: https://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=5022


Relief Measures for Affected Policyholders and Takaful Participants

  1. Deferment of payment of life insurance premiums and family takaful contributions
  2. Extension of flexibilities to reinstate or preserve life insurance and family takaful protection
  3. Flexibility to meet general insurance premiums and general takaful contributions
  4. Expedited claims processing
  5. Additional Regulatory and Supervisory Measures

Full details available at: https://www.bnm.gov.my/index.php?ch=en_press&pg=en_press&ac=5022


See also:
FAQs on BNM'S funds for SMEs affected by COVID-19:
https://www.bnm.gov.my/index.php?rp=en_faqcovid19sme


Cover image: New Straits Times

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