Bank Negara Malaysia has also extended various types of assistance to facilitate Small Medium Enterprises (SMEs) in Malaysia that affected by the COVID-19 pandemic.
(i) Explain FOUR (4) types of assistance for SMEs.
Highlights The MPC reduced the Overnight Policy Rate by 50 basis points to 2.00% at the May 2020 MPC meeting, to cushion the economic impact from COVID-19 and to support the improvement in economic activity. The Bank adjusted the statutory Reserve Requirement to support financial intermediation activity. The MPC reduced the OPR to provide support to the economic environment Ateacher and March 2000 Marty For Malaysia, estic condities Policy Committee (MPC) meeting the Ownicht erly been ected by the padel. The wake Policy Rate (OPR) was reduced by 25 luis points temal demand eines will certa lurper drug More restly, the May 2020 MPC meeting the e detesti cei ctivity. The MCO, while OPR was further refered by asi polets to 2.001% has also costred production capacity and The cline and fed the correth OPR ending Laboratories are expected to compared to 227 1.75 wereld. Er we spectively. In total, the OPR has been reded by 100 partlarly challenging in the test of the year hasis pas this year The fiscales, alongside tary and Gwalcownie codices have wesenli the cy With were all top citly. Me to contain the COVID-19 p Ne kete Conditional MCO, come activity denle have disrupted cock tivity at midatedrink and waity. Sabates tial policy still introduced by many co, con wative, dar mainly to projects for watentially pled with the producing of the love bal oil prices. Underlying infation is expected globally, would partially mitigate the impact to be add gw the projectes de of COMID-19. Gowth prospects bold power in growth proxects and labor market codice 2121 with the expected cost of the pas The facial sector is oud with fimilinu Together, the total OPR reduction of 100 basis tutis operating with talandy she d finaria bes. Liblity emple, este byli idity injection by the Bank vi vairs toebehat you will party cookie tecipated ing right per oferite de and apport the improvement in vere pe alte redactice in the Statutory Reservedele tive. The MIPC will come to Rent (SRR). The Bank stands to promote the clock for domestic growth and infot vile quity in the latest trenderly The Break will see pole propriate to market citos, conducive to support all create abding die sustainable termediate activity The Bank adjusted the SRR to support financial intermediation activity The Busk adjusted the SRR was part of the Bank's.com Ou5 May 20, the Bank at MCS MGII can be wed by all taking institutices to fully e the SR compliance effective 162100. This flexibility to the banking instituti i wilable at On 19 March 2:30, the Basked that the SER 31 May 2001. This wasure will be pertely ratio will be led by 100 points fo3.00 to 20 effective 20 March on to them. mother RM6 Wie worth of liquidity into the bar SRR ratio redactice, ench Principal Dealer is also able to che sian Series (BIOS) The SRR balto mage Listy and Malaysian GMGE totaal theme of wary policy. The of up to RM as part of the SRR compliance OPR these site wed to sign the stance This exility to the Principal Dealers is able til 31 2001. The will we appreciate Rios worth of it QB1Q 2030 Other policy highlights in the first quarter of 2020 Policy highlight Salient details Policy Document (PD) The PD came into effect on 1 January 2020 setting out the obligations of report on Anti-Money ing institutions with respect to requirements imposed under the Anti-oxy Laundering, Countering Laundering, Anti Terrorism Financing and Proceeds of Unlawful Activities Act Financing of Terrorism 2001, requirements on reporting institutions in implementing a comprehensive and Targeted Financial risk-based approach in managing ML/TF risks, and targeted financial sanctions Sanctions for Financial requirements on financial institutions regulated or supervised by the Bank Institutions (AML/CFT The PD is a revision and consolidation of the AML/CFT Sector 1 to Sector 4 and TFS for Fis) policy documents Exposure Draft (ED) on Corporate Strategic Plan (CSP) The ED was issued on 16 January 2020 on expectations of development financial institutions (DFL) in developing business plans and finding strategies. The ED sets out (1) governance requirements to ensure effective implementation of the CSP: (2) key features of the CSP such as the Statement of Corporate Intent and Annual Funding Requirement; and (3) guidance on the implementation of the Performance Measurement Framework for DFIS. Exposure Draft (ED) on Recovery Planning The ED was issued on 17 January 2020, setting out key principles, requirements and supervisory expectations on the development and maintenance of recovery plans by financial institutions. Robust recovery plans are expected to enhance supervisability, recovery and resolvability of financial institutions Policy Document (PD) on Domestie Systematically Important Banks (D-SIDs) Framework The PD was issued on 5 February 2020 to facilitate the identification of system ically important banks (D-SIB) whose distress or disorderly failure may cause significant disruption and result in adverse spillowers to the financial system and the economy The PD acklesses the following elements on D-SIB (1) Regulatory require ments and policy measures that are applicable to D-SIBs, such as the capital surcharge above the minimum regulatory requirement to increase the bank's loss-absorbance capacity: (2) intensity of supervisory oversight by the Bank, and (3) macroprudential surveillance activities of the Bank. The PD on Capital Adequacy Framework (Capital Components) was updated on 5 February 2020 to incorporate the Higher Loss Alsorbency requirement that is applicable to a D.SIB. Exposure Draft (ED) on Licensing Framework for Digital Banks The ED was updated on 3 March 2020 to incorporate further details on the sim- plified regulatory framework applicable to digital banks during the foundational phase. This includes, among others, the simplified requirements on capital adequacy and liquidity risk. 38 BNM QB 1Q 2020 Policy highlight Salient details Measures to Assist Individuals, SMEs and Corporates Affected by COVID-19 A number of measures were antzounced on 25 and 27 March 2020 to assist individuals, SMEs and corporates affected by COVID-19. These include financial relief measures, regulatory and supervisory measures, and leading assistance. Among them were: Financial Relief Measures A 6-month deferment offered by banking institutions on all loan/financing te payments (except credit card balances) of individuals and SMEs on 1 April 2020. An option provided to credit cardholders to convert their outstanding Imances into a 3-year term loan at a lower interest/profit rate. An option for affected life policyholders and family takaful participants to defer premiums/contribution payments due for three months without affecting policy coverage, with effect from 1 April 2020. Flexibility provided by general insurers and takaful operators for policyhold- ers and takaful participants to meet preminumns/contributions due, including by restructuring of policies/certificates. Expedited insurance and takaful claims processes related to COVID-19. Regulatory and Supervisory Measures Flexibility for banking institutions to draw down on the capital conservation buffer of 2.5%, operate below minimum liquidity coverage ratio of 100% and utilise the regulatory reserves that were set aside during periods of strong loan growth. These buffers are expected to be restored within a reasonable period after 31 December 2020. . Minimum Net Stable Funding Ratio requirement of 80%, effective on 1 July 2020. Banking institutions will be required to comply with the minimum requirements of 100% from 30 September 2001 Lowered interest rate (IRCC) and profit rate (PRCC) stress factor caps for in- surers and takaful operators from 40% to 30% starting 31 March 2020, to better reflect the prevailing market conditions Letting facilities for SMES BNM's Fund for SMEs (the Fund) was mobilised and bolstered to provide immediate relief for Malaysian SMEs to withstand the economie fallout from the pandemnic. The Fund, totalling RM13.1 billion, includes three new facilities which are: Special Relief Facility (SRF) to help alleviate the short-terin cash flow problemas faced by affected SMEs Agrofood Facility (AF) to increase food production for both domestie consump- tion and exports and Automation and Digitalisation Facility (ADF) to incentivise SMEs to automate processes and digitalise operations to increase productivity The Bank also reduced the maximum financing rates charged to SMEs 39
