GOODWILL DISCOUNT FOR EARLY SETTLEMENT OF EXISTING HIRE-PURCHASE AGREEMENTS FOLLOWING THE IMPLEMENTATION OF THE HIRE PURCHASE (AMENDMENT) ACT

Dear valued customers,

Pursuant to the joint media statement issued on 2 December 2025 by The Association of Banks in Malaysia (ABM), the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), and the Association of Development Finance Institutions of Malaysia (ADFIM), Bank Simpanan Nasional (BSN) will offer a goodwill discount for early settlement of existing fixed-rate hire-purchase agreements, including agreements which apply the Rule of 78 method. This initiative is undertaken in line with the expected implementation of the Hire-Purchase (Amendment) Act (HPAA) coming into force and to reflect our commitment to fair and responsible treatment of consumers.

This programme will commence once the HPAA comes into force, which is expected in the first quarter of 2026. BSN will provide further notification to customers when the act is officially in force.

Individuals and micro or small businesses with fixed-rate hire-purchase agreements and/or which apply the Rule of 78 method:

  • Entered into before the HPAA takes effect; or
  • Entered into during the 18-month grace period allowed under the amended act; and
  • Those who choose to settle their hire-purchase financing early i.e. any time before the loan or financing maturity.

At the point of early settlement, accounts should:

  1. Not be in arrears exceeding 90 days;
  2. Not be under legal action or issued with a repossession order; or
  3. Not be under an existing restructuring and rescheduling (R&R) or enrolled in a formal debt management programme.
  • The goodwill discount will be calculated based on the features of the existing hire-purchase agreement (such as timing of early settlement and rate structure) and applied to the net balance due. The intention is to offer early settlement treatment that is broadly comparable to the approach under the amended act.
  • The exact calculation and amount of goodwill discount may vary by bank, by product and will be explained to customers at the point of application for early settlement.
  • Customers who choose to continue making payments in accordance with the agreed schedule until the end of the tenure will not be affected by the change.

The details of the goodwill discounts and operational mechanism will be notified and implemented after the Hire-Purchase (Amendment) Act (HPAA) is gazetted.

NOTE: