A. ON INTERIM MEASURES BY THE BANKING SECTOR
1. What are the interim measures introduced to ease the financial strain of affected businesses and individuals following the outbreak of COVID19?
BDCB and the Brunei Association of Banks (BAB) have agreed to continue the following existing interim measures to all bank customers, both businesses and individuals affected by the COVID-19 outbreak, until 31 December 2021:
2. What are the criteria for borrowers to qualify for the interim measures (deferment/ restructuring / conversion of credit card facilities)?
Amongst others, the following criteria will apply:
- Borrowers show a good repayment history, i.e. outstanding loans/ financing are not past due for more than 90 days on 1 April 2020 or on the date of application.
- Borrowers are able to prove that they are facing financial difficulties and that their income has been adversely affected by COVID19.
Ultimately, each application will be based on the financial institutions' assessment and credit policy.
3. Do I still qualify for the interim measures if I am not financially affected by the COVID-19 pandemic?
These interim measures are primarily focused on assisting businesses and individuals who have endured deteriorating incomes and cash flows due to the effect of COVID-19. Hence, only affected borrowers due to the COVID-19 pandemic will be eligible for the interim measures. Any other customers are welcomed to approach their financial institutions to discuss other suitable arrangements.
4. I have been laid off recently and I am on unpaid leave. Will banks/ finance companies consider granting me the relief measures?
This will be subject to your respective financial institution's assessment, such as your repayment capacity. You are encouraged to approach your respective financial institutions to discuss suitable arrangements.
5. Will there be additional cost to customers? What fees and charges will be waived by financial institutions for deferment, restructuring or conversion of credit card facilities?
These interim measures are to assist the affected customers. As such, banks are expected to waive fees, and charges relating to processing the deferment, restructuring and conversion of credit card facilities. Any third party fees and charges such as legal and valuation fees, if applicable will continue to be paid by the customer.
6. What type of loan/ financing is included under personal loans/ financing?
Personal loan/ financing includes all secured and unsecured personal loan/ financing. This includes a variety of existing personal (general) loans/ financing facilities. Customers should discuss with their respective financial institutions on available options to them.
7. What type of loan/ financing is included under property loan/ financing?
Property loan/ financing includes all loans/ financing related to home ownership and property investment granted by licensed financial institutions in Brunei Darussalam. This includes loans/ financing for the construction and renovation of properties as well as home equity loan/ financing. Customers should discuss with their respective financial institutions on available options to them.
8. Which banks offer these interim measures?
All licensed banks in Brunei Darussalam, including Perbadanan TAIB, are expected to participate in providing the interim measures. While the banks will endeavor to assist the affected customers, each application will be based on each financial institution's assessment and credit policy.
9. How can I learn more about what my banks can offer and how do I apply for the measures above?
Please reach out to your respective banks for their offers, and terms and conditions. Wherever possible, interested applicants are encouraged to visit your respective financial institutions' websites to download application forms and submit your applications online to avoid overcrowding in the banks.
10. If I already have a loan/financing under deferment/restructuring, will I be eligible to the extension of these measures?
Please reach out to your respective banks for their offers and terms and conditions.
B. DEFERMENT ARRANGEMENTS
11. What is deferment of loan or financing payment?
A deferment on loan/ financing means borrowers are only required to pay the interest/ profit portion of their monthly loan/ financing during the deferment period. This arrangement provides temporary relief to the affected borrower during the challenging period. Instead of the full monthly repayment, the borrower will be allowed to pay a portion of the monthly repayment for a fixed period of time.
Borrowers are expected to repay back the deferred payments in full after the deferment period. Borrowers need to be mindful that additional interest / profit will be incurred on the deferred payments. Thus, they should discuss the terms of the deferment arrangement with their financial institutions, including other alternative options available to them.
12. Does a deferment lead to any changes in the tenor of the loan / financing?
Banks may provide deferment to affected customers in any of the following:
- Deferment with no change to the remaining period of the existing loan / financing;
- Deferment with an extension to the remaining period of the existing loan / financing;
Customers are encouraged to discuss with their respective financial institutions on existing options available to them.
13. Who can apply for a deferment arrangement?
Affected businesses and individuals, including the self-employed, during COVID19 are eligible to apply for a deferment. Please reach out to your respective banks for consultations.
The public is reminded that each application will be based on each financial institution's assessment and credit policy.
14. I am working as a civil servant (Government), can I apply for a deferment?
Borrowers who are directly employed by the Government may apply for a deferment if they could demonstrate that they have been financially affected by the COVID-19, such as significant income reduction from their rental properties. Please reach out to your respective banks for consultations. Any applications will be subjected to individual financial institution's assessment and credit policy.
15. When can I apply and when does this assistance end?
Please reach out to your respective banks for their offers and terms and conditions. As the assistance is only valid up to 31 December 2021, you may wish to approach your respective bank as early as possible to discuss the possible financing arrangement.
16. How long can I defer my principal loan / financing repayment?
The deferment period will only be applicable up to 31 December 2021. For example:
- A borrower who applies for a deferment in September 2021 will have up to 4 months' principal deferment from the date of approval or until 31 December 2021 (whichever comes first), subject to individual financial institution's assessment and credit policy.
- A borrower who applies for a deferment in October 2021 will have up to 3 months' principal deferment from the date of approval or until 31 December 2021 (whichever comes first), subject to individual financial institution's assessment and credit policy.
17. Why is the deferment only applicable on the principal and not on both principal and interest/ profit repayment?
This decision was made together between BDCB, MoFE, and the banks in consideration of the risks to the economy and financial consumers.
18. How long does it generally take financial institutions to process the deferment applications?
Each application is subject to individual financial institution's assessment and credit policy, where the process may differ from institution to institution. Customers are encouraged to approach their respective financial institutions on their due process and procedures.
19. What happens to my loan/ financing after the deferment period?
It is important to note that borrowers will need to honour the deferred repayments in the future. This may include a higher subsequent installment amount while preserving the original loan/ financing tenor or an extension of loan/ financing tenor after the deferment period. Therefore, borrowers should ensure that they understand and discuss with financial institutions the options available to resume their scheduled repayments after the deferment period.
20. If I apply for a deferment, will my credit report/ scoring be affected?
No. Your credit report should not be affected during the deferment period. In the event that your credit report does not appear to be in order, please contact Credit Bureau of BDCB at 7372369 or via email at birokredit@bdcb.gov.bn
21. Can I apply for both a deferment and restructuring on my personal loan/ financing?
Borrowers can only apply for either a deferment or a restructuring on the same personal loan/ financing. This will be further subject to the financial institution's assessment and credit policy.
22. Can I apply for a deferment on my housing loan/ financing and a restructuring on my motor vehicle loan/ financing?
Borrowers may apply for a deferment or restructuring that is appropriate to their needs. This will be subject to the individual financial institution's assessment and credit policy.
23. Can I still apply for a new loan/ financing after applying for a deferment/ restructuring facility?
The TDSR remains an important tool for many parties. For the individual, it serves as a financial management tool to help understand their monthly obligations and cash flow needs. BDCB has maintained its existing Total Debt Service Ratio (TDSR) regulations for borrowers with a net monthly income of BND 1,750 - BND 10,000 to ensure that borrowers do not become heavily indebted. Borrowers may apply for a loan/ financing if they are still within their TDSR limit, where loan/ financing applications are further subject to individual financial institution's assessment and credit policy.
24. Can businesses apply for a new loan/ financing after applying for a deferment?
As existing TDSR regulations do not apply to the business sector, businesses are encouraged to discuss with their respective financial institutions, where lending decisions will be made based on individual financial institution's assessment and credit policy.
25. Can businesses with trade facilities such as letter of credit and trust receipts apply for a deferment/ restructuring facility?
Customers with the abovementioned facilities are encouraged to approach their financial institutions to discuss suitable arrangements.
C. RESTRUCTURING FACILITIES
26. How does a deferment on principal repayment differ from a restructuring facility?
Deferment refers to a postponement of principal payment temporarily, which will be paid for at a later date. In restructuring, the customer will continue to repay the loan but at a reduced monthly amount for a longer tenor, which will help reduce the overall monthly repayment.
27. How does a restructuring facility work?
A loan/ financing restructuring allows borrowers to reduce their monthly repayments by extending the loan/ financing tenor or lowering interest/ profit rate or both. This will further be subjected to the individual financial institution's assessment and credit policy.
28. How long can I restructure my loan/ financing?
Financial institutions may grant restructuring of personal and motor vehicle loan/ financing of up to 10 years, subject to the financial institution's assessment and credit policy.
29. Who can apply for a restructuring facility?
Affected businesses and individuals, including the self-employed, during COVID19, are eligible to apply for a restructuring facility.
The public is reminded that each application will be based on each financial institution's assessment and credit policy.
D. CONVERSION OF CREDIT CARD OUTSTANDING INTO TERM LOANS / FINANCING
30. How does a conversion of credit card outstanding into term loan/ financing work?
When the credit card outstanding balances are converted into a term loan/ financing, such balances can be paid as a fixed monthly repayment over a fixed period of time. In this case, the repayment will be up to three years.
A term loan/ financing may also incur lower interest/ profit rates than a credit card facility, subject to the bank's discretion. This could potentially provide relief to the affected borrower.
31. Who can apply for conversion of credit card outstanding into term loans/ financing?
This assistance is targeted at individuals employed in the business sectors, including those who are self-employed.
32. I am working as a civil servant (Government), can I apply for a conversion of my credit card outstanding balances into term loans / financing?
Individuals directly employed by the Government are not eligible to convert their outstanding balances into term loans / financing. This interim measure is targeted at individual employees in business sectors including the self-employed.
33. If I convert my existing credit card outstanding into a term loan/ financing, can I still use my credit card?
Borrowers may continue to use their credit card up to the remaining credit limit after taking into account the balance converted into a term loan/ financing.
34. What does BDCB mean by private/ business sector? Are employees in government linked companies such as Royal Brunei or JPMC considered as private/ business sector employees?
The private sector/ business sector includes companies/ business entities that are registered or incorporated under the Companies Act (Cap. 39) and Business Names Act (Cap.62). This consists of partnerships, sole proprietors and MSMEs.
Government linked companies are recognized as legal entities and considered as private sector.
35. I have converted my credit card outstanding into a term loan / financing. I have used the remaining balance on my existing credit card and would like to convert this new outstanding balance again into a term loan / financing. Will I be able to do this?
This is subject to your individual bank's assessment and credit policy. Borrowers are encouraged to discuss further with their respective bank(s).
E. SHORT-TERM FACILITY
36. What is meant by the short-term facilities provided by banks to meet liquidity needs of businesses?
Banks and finance companies will also strive to meet the liquidity needs of affected customers through short-term loan facilities, subject to their assessments. Should businesses require facilities to meet their liquidity needs, they are advised to approach the banks and finance companies for further details on the short-term facilities available.
F. GENERAL
37. What has been the impact of COVID-19 on the banking sector in Brunei Darussalam?
As the regulator and supervisor of the financial sector, BDCB is committed to safeguarding the stability of our financial sector through continuous monitoring and supervision. BDCB affirms that the banking sector remains sound and stable.
At this juncture, BDCB has increased the frequency of our dialogues with the industry on their overall resilience to ensure essential financial services remain accessible to households and businesses.
38. How do BDCB's measures compare to other central bank jurisdictions?
BDCB takes note of wide varying measures undertaken by other central banks in response to the impact of COVID-19. In this regard, each country has undertaken appropriate measures with the size and structure of their economies, highlighting that there is no one-size-fits-all approach.
In Brunei Darussalam's context, the interim measures are considered appropriate for the time being, as agreed between BDCB and the BAB.
39. Will BDCB introduce any measures across other financial sectors such as insurance and capital markets?
BDCB continues to work closely together with other financial institutions, including capital markets and takaful/insurance companies, to address both arising and anticipated issues across the financial sector.
40. Is BDCB going to regulate the lending rates on credit facilities?
Over the years, BDCB has been active in promoting competition amongst the banking sector where banks are encouraged to price their lending rates based on the risk profile of each customer. In light of the current environment, the banks have committed to review their individual lending rates.
41. How does BDCB ensure the continuity of essential services in the financial sector?
The banking sector plays an important role in channeling funds within the economy. BDCB has actively engaged the banks to ensure that their business continuity plans are in place even prior to the first confirmed case in the country. This is a testament to the industry's preparedness to ensure stability of the financial system and continue to provide essential services to the general public.
Essential services include the availability to service withdrawals, safekeeping of money and payments within a reasonable period.
42. Do existing insurance and takaful policies cover COVID-19?
Currently, insurers and takaful operators in Brunei Darussalam have reported that most personal health insurance policies/certificates will cover hospitalization expenses and death benefits related to COVID-19. Few insurers have also extended benefits to their life insurance policyholders diagnosed with COVID-19, including lump sum payments upon diagnosis, daily cash benefit for hospitalization and customer care fund to support their existing policyholders.
43. What steps are being taken by BDCB to reduce the contamination of COVID-19 through the handling of cash?
There is currently no evidence showing that the COVID-19 outbreak can be transmitted through the touch of paper currency or polymer, and even coins. According to a statement from the substrate supplier for our local currency, there is no evidence to show that the virus can spread through surface infection and the notes. The supplier also cited a statement from the World Health Organization (WHO) that our currency is not exposed to a high risk for spreading the virus.
BDCB has taken the necessary steps in managing our currency in circulation to be safe to use following international best practices and other central banks. The public is advised to take into account the advice and guidelines issued by the Ministry of Health to practice hygiene at all times, such as regularly washing hands. There are also other alternative options such as using digital or contactless payment, including debit and credit cards and mobile payments which the public is highly encouraged to use.
44. Where can customers get their self-inquiry report (SIR) since the Credit Bureau counter is closed?
Currently, SIR services have been suspended until further notice as part of BDCB's precautionary measures to ensure social distancing. For the time being, customers are advised to consult their respective financial institutions, where these financial institutions will communicate directly with Credit Bureau of BDCB. Credit Bureau, BDCB can be contacted via hotline 7372369 or via email at birokredit@bdcb.gov.bn
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