# 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.
- Title: Malaysia Banks Adopt Reducing Balance Hire-Purchase | Shortify
- Summary: 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…
- Keywords: malaysia, banking, hire-purchase, reducing balance, domestic trade ministry, armizan, confest 2026, hire-purchase act 2026, news, world, Banks, Adopt
- Source: Malay Mail — https://malaymail.com/news/malaysia/2026/09/19/fourteen-of-20-banks-now-offer-reducing-balance-hire-purchase-financing-says-armizan/235794
- Published: 2026-09-19T16:50:21+00:00
- Read time: 1 min
- Topics: malaysia, banking, hire-purchase, reducing balance, domestic trade ministry, armizan, confest 2026, hire-purchase act 2026, news, world
## 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.
## Key takeaway

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.