Bank Negara Malaysia (BNM) reduced the Overnight Policy Rate (OPR) by 25 basis points (bps) to 2.75% on July 9.
Well thank you very much. Perhaps one day Bank Negara's historians will solve the mystery why the OPR was raised in the first place.
The OPR was cut by 0.25% on July 9th 2025 which is FIVE days ago. Just now (about 5 PM) we called our bank to ask about the downward adjustment in our monthly instalment payments for a property loan as well as the overall amount outstanding - since we are planning on redeeming the property.
The young man on the phone was helpful and he told us the new monthly instalment amount which his computer system had generated. But he was not able to tell us the new total loan amount that would be outstanding.
And then he dropped a bombshell. He said the new lower monthly instalment will apply beginning 5th September 2025 !! That is almost TWO MONTHS AWAY !!
Why would it take TWO MONTHS for the Banks to lower their interest rates? It is as simple as keying in the new interest rate and the new date (July 9, 2025) and the bank's computers will automatically calculate, generate and adjust the Bank's entire portfolio within seconds.
Which is exactly how the young man was able to tell us over the phone the lower instalment amount we would have to pay. Obviously the Bank's computer system has already generated the new instalment payment amount. So why wait until September 5th to apply the new interest rates?
The bank's borrowers are still being "charged" two months' interest at the older higher rate. This is not fair. It also means the Banks are making a higher margin - their cost of funds has just decreased by 0.25% but they will still charge this 0.25% to their clients until 5th September. Their spread or margin has just increased by 0.25%. At our expense. Banyak cantik.
When the OPR went up I dont recall the Banks waiting TWO MONTHS before raising their interest rates. Interest rates went up instantly. But when the OPR has been cut, the Banks are taking TWO MONTHS to adjust their rates downwards!!
They should adjust their interest rates IMMEDIATELY. And if the banks are late, then they should reimburse their Borrowers for the number of days they were late - calculated using the older interest rates.
I keep saying that banking in this country is an oligopoly. There are just a few players. And since many of the large players are GLCs owned by the gomen, it is almost a monopoly. That is how they can get together so easily to fix the rules. THEY decide when they will cut the rates.
Hello Bank Negara, please instruct the Banks to adjust their rates YESTERDAY. Otherwise please tell the Banks to compensate us for the losses.
