Malaysia | BNM announces new funds for SMEs

On 5 February 2021, Bank Negara Malaysia ("BNM") announced:

• an additional RM2 billion for the Targeted Relief and Recovery Facility (“TRRF”)
• the establishment of a RM200 million Disaster Relief Facility (“DRF”) 2021.

TRRF

The TRRF was a facility announced in the Budget 2021, established to assist eligible SMEs in the services sector. With the additional RM2 billion injection, the total allocation of the TRRF increases to RM4 billion. The TRRF will be available until 31 December 2021 or until full utilisation, whichever is earlier.

Additionally, BNM has announced that SMEs that are recipients of the Special Relief Facility and PENJANA SME Financing are now eligible to apply for TRRF, subject to a total financing limit not exceeding RM500,000. This represents a shift from BNM’s previous position when the fund initially launched, when recipients of the Special Relief Fund and PENJANA SME Financing were not eligible for the TRRF.

DRF 2021

The DRF 2021, with an allocation of RM200 million, is established to ease the financial burden and assist in the resumption of business operations of SMEs affected by the recent floods in districts identified by Agensi Pengurusan Bencana Negara as flood disaster areas.

DRF 2021 aims to assist SMEs cover the costs of repairs and replacements of damaged assets for business use. Available to Malaysian SMEs, including microenterprises, the maximum amount of financing is RM500,000 per SME and up to RM75,000 per micro enterprise. The tenure of the financing is up to five years and includes a moratorium period of six months on both principal and interest payments. The financing rate is up to 3.50% per annum, inclusive of guarantee fee.

The facility will be available until 31 July 2021 or until full utilisation, whichever is earlier.

The full announcement is available here.

Amendments to permitted disclosures of customer documents and information

The list of permitted disclosures that a financial institution is permitted to make in relation to the affairs or account of its customers has been expanded by several amendments to the relevant legislation by:

1. Financial Services (Amendment of Schedule 11) Order 2021;
2. Islamic Financial Services (Amendment of Schedule 11) Order 2021; and
3. Development Financial Institutions (Amendment of Fourth Schedule) Order 2021,

(collectively “Amendment Orders”).

The Amendment Orders amend the relevant schedules in the following ways:

• Financial institutions are now permitted to disclose documents and information to all persons to whom that disclosure is required to be made under a hiwalah order. Previously this only covered disclosures to persons who have obtained a garnishee order;
• Financial institutions are now permitted to comply with a court order made by a court not lower than “a Syariah Subordinate Court, a Syariah High Court, or a Syariah Appeal Court” in addition to the Sessions Court;
• The scope of documents and information which is permitted to be disclosed to the Inland Revenue Board of Malaysia for the purposes of facilitating exchange of information pursuant to taxation arrangements or agreements under theIncome Tax Act 1967has been expanded to include section 132B of theIncome Tax Act 1967(information under any arrangement with the government of any foreign territory for mutual administrative assistance in tax matters, including simultaneous tax examinations, automatic exchange of information or tax administrations abroad);
• When a financial institution has reason to suspect that an offence under any written law has been, or is being or may be committed, the list of persons to whom customer documents or information may be disclosed to has been expanded to include any officer of (a) any financial institution or its association; (b) an Islamic financial institution as defined in section 143 of theIslamic Financial Services Act 2013or its association; or (c) a prescribed institution as defined in subsection 3(1) of theDevelopment Financial Institutions Act 2002or its association; who may receive the documents or information.