The goodwill discounts will apply at the point of early settlement for existing fixed-rate hire-purchase contracts, including those calculated using the Rule of 78 method. – Bernama file photo
KUALA LUMPUR (Dec 2): Malaysia’s banks will offer goodwill discounts for early settlement of existing fixed-rate hire-purchase agreements following the Dewan Negara’s passing of the Hire-Purchase (Amendment) Bill yesterday.
In a joint statement today, the Association of Banks in Malaysia (ABM), the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and the Association of Development Finance Institutions of Malaysia (ADFIM) said the collective initiative aims to support affected customers ahead of the implementation of the Hire-Purchase (Amendment) Act (HPAA).
The associations said the goodwill discounts will apply at the point of early settlement for existing fixed-rate hire-purchase contracts, including those calculated using the Rule of 78 method.
“Under the HPAA, the flat rate and the Rule of 78 method will be abolished for new customers, marking a major shift in how hire-purchase financing is calculated.
“To ensure fairness for customers who entered into agreements prior to the HPAA or during the permitted grace period, the banking industry will offer goodwill discounts for early settlement of these fixed-rate hire-purchase agreements,” they said.
The banks said that the initiative reflects the industry’s commitment to ensuring customers feel supported and valued during the transition.
“The goodwill discount is an industry-wide measure designed to provide affected customers with treatment that is broadly comparable to what new customers will enjoy under the revised framework.
The goodwill discount programme will commence from the HPAA’s effective date, which is expected in the first quarter of 2026.
“The banking industry will notify the public once the HPAA has come into effect,” the statement said.
The associations also commended the Ministry of Domestic Trade and Cost of Living (KPDN) and Bank Negara Malaysia (BNM) for driving reforms aimed at enhancing fairness and transparency in hire-purchase financing.
“Their leadership and collaborative approach have paved the way for a more equitable framework that benefits consumers and strengthens trust in the financial system,” they said.
They said customers who continue making payments according to their agreed schedule until the end of the tenure will not be affected by the Rule of 78 method.
“As such, customers may continue to pay the same instalments as originally agreed and do not need to take any action.
“Once the HPAA has come into effect, customers are encouraged to visit official bank websites or branches for more information, contact their respective banks for guidance on eligibility and application procedures for the goodwill discount, and stay informed through announcements from industry associations,” the associations added. – Bernama
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