From Malay Mail · · 1m 10s
Malaysia Banks Adopt Reducing Balance Hire-Purchase
Fourteen of 20 Malaysian banks now use reducing balance hire-purchase financing, with six more expected by Dec 31.
In brief
Fourteen of 20 Malaysian banks now use reducing balance hire-purchase financing, with six more expected by Dec 31. Malaysia's domestic trade minister reports 14 of 20 banks have adopted reducing balance hire-purchase financing by Sept 18, with six more to follow by Dec 31. Originally reported by Malay Mail.
Hire-Purchase Financing Update
Fourteen of twenty banking institutions in Malaysia now offer reducing balance hire-purchase financing as of September 18.
Transition Deadline
The remaining six banks are expected to complete the transition by December 31, according to Domestic Trade Minister Datuk Armizan Mohd Ali.
Regulatory Context
This change follows amendments to the Hire-Purchase (Amendment) Act 2026, which replaces flat interest rates with reducing balance method and effective interest rates.
Consumer Benefits
The reducing balance method makes early loan settlement more transparent for consumers by calculating interest on current loan balance.
Compliance Target
The ministry aims for 80 percent of hire-purchase providers to offer financing in compliance with the Act by the end of this year.
Grace Period
Hire-purchase providers not yet fully prepared have a grace period until March 31, 2027, with full compliance required from April 1, 2027.
Here's the gist
Malaysia's domestic trade minister reports 14 of 20 banks have adopted reducing balance hire-purchase financing by Sept 18, with six more to follow by Dec 31.
