Banking sector ready for MyFirstHome Scheme

THE banking sector is well-positioned to make assessment of affordability and the creditworthiness of borrowers under the "My First Home Scheme".

Bank Negara Malaysia (BNM) governor, Tan Sri Dr Zeti Akhtar Aziz, said there would be no risks to the quality of household loans from the scheme as the focus was on affordability.

"The verification of affordability is very important and for the banking sector it is well-positioned to make the assessment, and it knows also the credit exposure of the borrowers," she said.

Zeti said this at a media briefing on the release of BNM Annual Report 2010 and Financial Stability and Payment Systems Report 2010 here Wednesday.

She said there were many young people who had job security, good prospect and income stream, a combination of husband and wife, who were in position to enter loan agreement to purchase property under the scheme.

Under the scheme, young people that earned less than RM3,000 a month could obtain up to 100 per cent financing to buy houses costing between RM100,000 and RM220,000 with a repayment period of up to 30 years, she said.

On the lending guidelines to banks on household debts, Zeti said, it would be introduced soon as BNM has issued the concept paper.

Zeti said the guidelines were not issued now because banking institutions had to put in place the mechanisms within their systems to facilitate the new guidelines and at the same time not cause any delay in processing of loans.

She expected the guidelines to be introduced in the second half of this year. – BERNAMA

SOURCE: Business Times

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