fomca logoJuly 5, 2022 10:15 PM
PETALING JAYA: Amid speculation that Bank Negara Malaysia (BNM) will raise its overnight policy rate (OPR) again, a consumer group has urged banks to be empathetic toward the people’s financial plight.

Federation of Malaysian Consumers Associations (Fomca) CEO Saravanan Thambirajah said when BNM raised the OPR by 25 basis points to 2% in May, many people saw their monthly loan repayment rates increase.

He added that another rise in the OPR would likely further increase existing loan repayments.

“They (banks) should engage with those who have problems repaying their loans, and offer a revised repayment agreement,” he said.

Saravanan also suggested that BNM implement a system to provide aid to those having trouble bearing the increases in loan repayments, particularly those from the B40 group.

“That’s why financial planning is crucial, and we advise those who are feeling the pinch to seek out financial counselling from the Credit Counselling and Debt Management Agency (AKPK).”

Moody’s Analytics reported that BNM was expected to lift its OPR by 25 basis points, from 2% to 2.25%, at its fourth monetary policy committee (MPC) meeting of the year, which began today.

In its report, the research firm also noted that the country’s central bank hiked the rate in May, lifting it from the record low where it had languished for nearly two years.

Meanwhile, Goh Lim Thye, a senior economics lecturer at Universiti Malaya, said increases in loan repayment rates due to an OPR hike would vary depending on an individual’s outstanding loan amount.

He said the increase could range from an additional RM30 per month to a few hundred ringgit.

“For example, using an online loan calculator, the monthly repayment for a 25-year loan of RM350,000, with an interest rate of 3.1%, is RM1,678.

“But at 3.35%, the monthly repayment increases to RM1,724 per month, a RM46 increase per month,” Goh told FMT.

Source: https://www.freemalaysiatoday.com/category/nation/2022/07/05/have-a-heart-consumer-group-tells-banks-ahead-of-expected-opr-hike/