Bank Negara limit the maximum tenure of Personal Loans and Home Financing
Bank Negara has tighten the maximum tenure of personal loans to 10 years and home financing to 35 years with immediate effect, as a measure to reduce the household indebtedness that keep rising.
Another measure is to prohibit on the offering of pre-approved personal financing products. The implementation of these measures are due to the increase of household debt to gross domestic product (GDP) ratio by 13 per cent to 83 per cent compare to 70 per cent in 2009. This is the highest level for developing countries in Asia.
For record, household debt to GDP in other developing Asian countries as follows:
- Thailand – 30%
- Indonesia – 15.8%
- Hong Kong – 58%
- Taiwan – 82%
- Japan – 75%
- Singapore – 67%