Following the six-month moratorium that began in March, borrowers will need to start repaying their loans starting October 1st as banks have announced they will not be extending the moratorium. Instead, banks are open to assist borrowers to restructure and reschedule their loans in a more targeted manner.

Bank Negara was quoted saying that banks are ready to offer various forms of repayment assistance including the lengthening of loan tenure, payment of interest only and flexible repayments.

Among the reasons for ending the blanket moratorium was because banks want borrowers to approach financial institutions to renegotiate their loans.

“The banks will have until the middle of next year to restructure and reschedule their loans,” a source said.

MIDF Research head of research Imran Yassin Md Yusof expects banks to see higher non-performing loans (NPLs) once the loan moratorium comes to an end, as borrowers may still struggle to start servicing loans after the spiked unemployment rates, post COVID-19.

“What is more important is the ability of banks to absorb the impact,” Bank Negara was quoted saying in response to the potential impact on banks once the loan moratorium expires.

“Borrowers are encouraged to approach their banks early to discuss suitable repayment plans based on their financial circumstances. They can also approach the Credit Counselling and Debt Management Agency and Small Debt Resolution Scheme,” the central bank added.

^{Reference:
Aberdi, Intan. "Banks Will Not Extend Moratorium". The Star Online, 2020, https://www.thestar.com.my/business/business-news/2020/07/21/banks-will-not-extend-moratorium.}