There must be a quota in the proposal by the government to reduce housing loan interest rates, as banks may not necessarily abide by suggestions that could add to their costs.

“I don’t think all applications for housing loans must be under this scheme. Banks will follow but they must allocate a quota for this. It’s like the PR1MA (1Malaysia People’s Housing Programme) where they allocate a certain amount for the scheme,” a banking analyst, who declined to be named, told SunBiz.

The analyst said different banks have different base rates, which determine their interest rates.

“If Bank Negara Malaysia (BNM) fixes the rate, this will impact the banks’ net interest margin because the way banks derive their base rates is very different. Some banks have high expenses and some have a low profit margin,” he said.

 

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MediaTitle - The Sun
Date - 29 Jan 2018

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