Attention, every lender! Bank Negara will use a new loan framework, Standardised Base Rate, to replace the Base Rate currently used in August 2022.
The Bank Negara announced in August this year that the existing Base Rate lending framework will begin to be replaced by a new lending framework, Standardised Base Rate. The existing Base Rate lacks comparability and transparency, and the Base Rate adopted by various banks is different. When lenders compare the loan interest rates provided by various banks, there is confusion and difficulty in comparison.
The new Standardised Base Rate will be more transparent, and lenders can more easily understand changes in loan interest rates and repayment amounts. Standardized Base Rate will only be linked to OPR. If OPR is increased by 0.25%, then SBR will also increase by 0.25%.
SBR applies to loans with variable interest rates, but not to loans with fixed interest rates. With a unified reference SBR interest rate, lenders can more easily see which bank offers more attractive interest rates.
The Bank Negara gives financial institutions a year to make adjustments, and existing borrowers will not be affected for the time being. This measure will be officially adopted on August 1, 2022.
