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BUSINESS

Bank Negara teams up with MoF, SC to regulate BNPL schemes

30/03/2022 01:20 PM

KUALA LUMPUR, March 30 (Bernama) -- Bank Negara Malaysia (BNM) BNM is working together with the Ministry of Finance (MoF) and Securities Commission Malaysia (SC) to regulate and monitor “Buy Now Pay Later” (BNPL) schemes through the enactment of the Consumer Credit Act this year. 

BNPL schemes, which are currently offered by non-bank operators, do not fall within the BNM regulatory purview or any regulatory agency, said the central bank in its Annual Report 2021 released today. 

“To further mitigate the risks that BNPL schemes may encourage consumers to spend beyond their means, we have also worked with the Financial Education Network to educate the public on the risks of using BNPL schemes,” BNM said. 

It added that for BNPL schemes offered by, or in partnership with banking institutions, the banking institutions are expected to observe practices that are consistent with responsible lending expectations. 

BNM explained that BNPL allows customers to make payments in instalments with zero interest, however, there may be other charges levied on the customers, such as processing and late payment fees.

In some cases, the total charges levied by BNPL providers on the customers may be higher than the total interest and charges imposed by conventional lenders.

As such, BNM suggests that the lender understand the terms and conditions, especially on fees and chargers before using BNPL schemes. 

“Lenders need to pay instalments in full and on time to avoid penalties and keep track of your BNPL commitments as it is easy to overspend when you use the schemes,” said BNM. 

-- BERNAMA

 

 


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