1) Propsective loan borrower will be assessed based on net income basis (instead of gross income) after deducting statutory deductions for tax and EPF and all other debt obligations (eg. car loan, other housing loan, credit cards) – effective from 1 Jan 2012;
2) Maximum car loan period not exceeding 9 years – effective from 18 Nov 2011.
On the maximum car loan period, it is not expected to have a signficant impact to many potential car buyers are currently there is only 2 banks offering car loan more than 9 years and approx 98% car loans are within 9 years.
The Star article
“Property sector to feel impact from tighter lending, slower sales”
http://biz.thestar.com.my/news/story.asp?file=/2011/11/22/business/9948736&sec=business
For better reading experience, the full article is as follows:
“Property sector to feel impact from tighter lending, slower sales”
PETALING JAYA: The winds buffeting the property industry may become stronger with the introduction of guidelines by Bank Negara to rein in household debt which becomes effective from Jan 1.
RHB Research Institute Sdn Bhd analyst Loong Kok Wen said in a report that these regulations would have an impact on the industry with the high-end segment of the market being more sensitive to regulatory tightening as financing availability gets narrower.
She said the stricter lending rules were likely to result in a 14%-37% decrease in affordability with the impact to be felt from the first half of next year.
The central bank issued guidelines last week in a move to clarify lending practices among financial service providers which included the requirement by banks to make appropriate assessment into prospective borrowers’ income after statutory deductions and consider all outstanding debt obligations.
Loong said that although banks were already assessing potential borrowers’ net salary in their evaluation process, lending would likely be tighten on home mortgages going forward on worries of rising household debt to gross domestic product (GDP) levels.
She said fundamentals in the market remained weak with the prolonged sovereign debt crisis in the European Union overshadowing the global economic outlook.
“From our recent conversation with developers, potential buyers are indeed taking longer time in their property buying decisions than previously, especially on premium properties. Mass housing will continue to fare better due to pent-up demand,” Loong said.
She added that property sales were likely to taper off (after a 21% growth in 2010) with a growth of 0% to 5% in 2012, given that sales were largely driven by GDP growth.
Loong said the house was maintaining an “underweight” and was still cautious on property stocks although they have recovered in tandem with the temporary rebound in the equity market.
“Our stock pick is selective,” she said, adding that UEM Land was recently upgraded to a “trading buy” and Mah Sing Group Bhd to “market perform”.
Loong expects UEM Land Holdings Bhd to benefit from more oil and gas-related news flow in Iskandar, while IJM Land Bhd’s share price could be supported by a potential merger and acquisition angle following the recent offer made by Permodalan Nasional Bhd to SP Setia Bhd.
– The Star Publication
Measures to Promote Responsible Financing Practices
21/11/2011
Bank Negara Malaysia issued today guidelines to financial institutions aimed at promoting prudent, responsible and transparent retail financing practices. The guidelines which will take effect from 1 January 2012 complement other measures that promote better protection for financial consumers and a sustainable credit market that contributes towards preserving financial and macro-economic stability.
The guidelines require financial institutions to make assessments of a borrower’s ability to afford financing facilities based on a prudent debt service ratio as inputs to their credit decisions. Financial institutions must make appropriate enquiries into a prospective borrower’s income after statutory deductions for tax and EPF, and consider all debt obligations, in assessing affordability. While this is consistent with the current practice of most financial institutions, the guidelines will facilitate a sharper focus and more consistent approaches across the industry to assessments of individual affordability. This guideline will thus ensure that the increasingly competitive conditions will not lead financial institutions to compromise prudent and responsible financing practices. The Guidelines also stipulate that the maximum tenure for vehicle financing applications that are received from 18 November 2011 should not exceed nine years.
The guidelines additionally aim to encourage sound borrowing decisions by consumers through better engagements with financial institutions that will help consumers carefully consider their ability to service all their debt obligations without recourse to further debt or substantial hardship. Clear expectations are also placed on financial institutions to ensure that consumers are treated fairly in the sales, marketing and administration of financing facilities. Financial institutions are also required to provide consumers with specific information on the total repayment amount and total interest cost as well as the impact of an increase in the financing rate to ensure that consumers understand the full implications of a borrowing decision. Bank Negara Malaysia will continue its surveillance and supervisory activities to ensure that the requirements are properly implemented.
Apart from the financial institutions under Bank Negara Malaysia’s purview, the Cooperatives Commission will also be imposing requirements on responsible financing practices on credit cooperatives. This will ensure that key providers of financing to the household sector will observe similar responsible financing practices.
Bank Negara Malaysia
18 November 2011
When I was working with ExxonMobil I managed to secure an emergency loan provided by the company for my father’s hospitalization.
Now this company is run by Petron, I did apply for the company emergency loan for my mother’s hospitalization. This was rejected.
HR cited that this kind of loan is guided by Bank Negara. Is that so that Bank Negara refrain this kind of loan? Loan is interest free payable to 24 months period.
Hi Hamdan, staff loan arrangement by a company to its staff or workers are not governed by Bank Negara. It’s more to the company’s internal affairs and management policies.
So the reason given (for rejection) is not concrete and valid.
However, since it was a change in ownership and management in your company, the previous management policies may not applicable anymore.
It is down to whether it is stated in your employment contract that you are entitled for such loan arrangement and what is the criteria of approving such application by you.
Wish you good luck!
Tuan
Saya nak ketahui procedure bank dan hak saya . Saya telah buat loan rumah kat RHB Yong peng tahun lepas. Loan say atak reject tapi di lambatkan dengan pelbagai syarat oleh pengurus bank.
1) Saya telah memeberi segala maklumat di kehendaki bank, Pegawai pemproses loan memeberitahu saya mereka perlukan personal bank saving balance . saya memberikan dan kemudian mereka berkata tak cukup dan memeberitahu saya selesaikan final settelement untuk kereta dan saya pun selesaikan. Kemudian mereka memeberitahu tak cukup sedangkan gaji saya RM 5500.00 dan tak ada commitment.Mereka mintak adatak saya mempunyai simpanan lain and memberikan asset declaration . Di sini saya memebitahu simpanan di bank itu adalh P&C saya tak boleh beritahu.
Alasan kedua mereka adalah peminjam mesti mempunyai loan pinjaman lain yang masih memebayar di bank lain. saya memberitahu saya tiada hutang lain , cuma saya baru nak beli rumah di kampong saya .
Saya menyuarakan sebelum ini saya ada membuat bayaran kereta di bank anda dan anda berkata sesudah settled balance loan kereta proses pinjaman rumah anda boleh di buat tapi akhirnya mereka berkata tidak cukup document. Tuan bolehkan cadangkan dan beri pendapat .