TOWARDS SECURING A COMFORTABLE

RETIREMENT

Financial Literacy Programme at Workplace

18 September 2013
Koid Swee Lian, CEO
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Overview
AKPKs Roles & Services
Credit & Debit

Financial Counselling
Debt Management Programme (DMP)
Better debt management
DMP Matrices
DMP benefits to credit providers

DMP application process flow

Self Help Guide: Debt Relief Plan

Wise Use of Credit Card
Financial Education Initiatives
POWER! Managing Your Debts Effectively
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AKPKs Roles
Set up in 2006 by Bank Negara Malaysia (BNM)
Part of financial consumer protection framework
More resilient household
sector
Avenue for existing & potential
individual
borrowers
to
enhance financial discipline:
Education
Credit counseling
Debt management

Sound & robust banking

system
Facilitates debt repayment
efforts
Minimizes incidence of loan
default arising from poor
debt management
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AKPKs Services
- Money
Sense Book/
module
- POWER!
Book/module
- Use simple &
plain language
- Collaborate
with smart
partners

Financial Education

Financial Counselling
Debt Mgt Programme

- Personalised programme
- Review fin. condition & tailor solutions
- Ongoing counselling & education

One-to-one:
- Advise on
credit &
related issues
- Assist in
analysing fin.
situation &
identifying
options to
address
credit issues

SERVICES ARE FREE OF CHARGE

4

Credit & Debt

Credit - Facility to borrow with agreement to repay credit
provider as per terms and conditions in contract.
Debt - When one borrows, one takes on credit & when one
uses a credit facility, one takes on debt.
Example:
One is given a credit card with a limit of RM3,000.
If one spent RM1,000 using credit card, that RM1,000 of
utilised credit now becomes a debt Before: RM3,000 credit available
After: RM2,000 credit still available
Debt: RM1,000
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Financial Counselling
Who is eligible? Retail consumer

Pre-condition? Attend public briefing

session
Counselling process
Review financial /credit issues
Devise personal budget plan
Cash flow management
Post-counselling decision
Debt management advice
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Debt Management Programme (DMP)

Assistance
Help resolving financial problems with banks/card issuers
Tailor made solutions for credit problems
Negotiate with lenders on borrowers behalf - no legal power
Qualifying Criteria for DMP
Not a bankrupt
Positive net disposable income
Not under advanced legal action
Loan exposure of < RM2 million
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Better Debt Management

Combination of -

Managing debt level -

housing loan

Priortise debt payments

hire-purchase
loan

Consolidate & refinance

Guarantor obligations

Dangers of borrowing to repay debts

credit cards

personal loans

Student loans

Dealing with debt problems

share margin
financing

Late payment notices / debt collectors

guarantors
liability

Filing for bankruptcy / exiting

bankruptcy

Avenues for assistance

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DMP Benefits to FIs

Revive default accounts
Reclassification to performing status

Yearly reviews (if any)

Collections by AKPK

Borrowers pay into AKPKs account

AKPK distributes to various FIs

DMP terminated upon non-payment

Waivers do not apply upon termination
Subsequent defaults minimal
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DMP Matrices
Subject

Type of Facility
& Tenure

Restructure /
Reschedule
Monthly
Payments

Waiver
Consideration

Payment Mode

Matrix I

Matrix II

Credit Providers Blanket Approval

Obtained

Require Credit Providers Approval

Restructuring / rescheduling of unsecured

loans where repayment, inclusive of
proposed interest, is within 10 years
Instalments to cover at least proposed
interest & can be stepped up during
repayment tenure - minimum of 1% of total
unsecured loan exposure or RM30, which
ever is lower, per credit provider

Restructuring / rescheduling of secured loans

(HL and HP) & unsecured loans that do not fall
under Matrix I
Instalments to cover interest at least
Other criteria
amount & months in arrears
value of property
cost & date of auction

Waivers on interest-in-suspense (IIS) &

penalty interest (PI)/Late Charges (LP),
where applicable
No waiver on loan principal and other
charges.

Waivers on IIS, PI/LP & other charges /

principal (for deserving cases)
HL waiver subject to:
value of property charged to credit provider
applicants net worth

Instalments paid via AKPK or direct to credit

providers

Instalments paid via AKPK or direct to credit

providers

DMP - Application Process

With complete
documents (including
1st payment slip)

Start DMP
(Matrix I)
Issue Letter
of Offer
MATRIX I

Prepare
Proposal

Average TAT: 8 working days

Public
Briefing

Counselling

DMP Form
Submission
MATRIX II

Prepare
Proposal
Seek FIs
Consent
Start DMP
(Matrix II)
Minimum TAT: 30 days

INITIAL CONTACT TO COUNSELLING STAGE

Appointment Form
Documents Checklist
Borrowers loan
details (BLD) Form
Form CBS01

Public Briefing
Or
Counselling

Eligible for
DMP

Loan Statement
Income Evidence
EPF Statement
CCRIS Report
Legal Letter

Compile
Documents

Appointment &
Counselling

Document Verification
Determine Eligibility
Repayment Capacity
Brief on On-Line DMP
Application & Procedures

Sufficient
NDI

Issue online
DMP Code

For branches with Public

Briefing*
General Enquiry or
Not eligible for
DMP

Options:
Self Managed Credit Providers /
BNM LINK
Petition for bankruptcy

Insufficient
Net
Disposable
Income (NDI)

* KL Main, Penang, Melaka, Johor Baharu, Kota

Kinabalu, Kuching

Applicant submits
DMP Application

MATRIX I
30 Days

DMP
application
submitted

NO

Withdrawal
(after 90 days)
No submission
Voluntary

YES

First
payment
in 30 days

NO

Withdrawal
No payment
Voluntary
DMP withdrawn

8 Working Days

YES

DMP Process Flow

Review & Assess
Request BLD
Evaluate & Counsel
DMP Committee
approve / reject

NO

YES

Start DMP

Issue Notification
Letter
(cc to FIs)

Issue Rejection Letter

Incomplete information
DMP declined

Criteria for Matrix I:

Unsecured loans only
No principal waiver
Tenure up to 10 years

MATRIX II

DMP application
submitted
1st payment NOT
required

21 Working Days

8 Working Days

1 Day

YES

DMP Process Flow

Review & assess
Request BLD
Evaluate & counsel
DMP Committee
approve / reject

YES

Send
Proposal to
FIs for
approval

YES

YES

NO
NO

Withdrawal
(after 90 days)
No letter required

Issue Rejection Letter

Incomplete information

Issue Rejection Letter

Proposal rejected by FIs

Criteria for Matrix II

Secured / Unsecured loans
Principal waiver
Advance litigation: BN / CP
Tenure > 10 years

2 Working Days

Inform Customer
&
Start DMP

Issue Confirmation
Letter
(cc to FIs

Customer pays to
AKPK or direct to FIs

Self Help Guide: Debt Relief Plan

Step by step guide for borrowers to
negotiate restructuring /rescheduling
of their loan(s)

Empowers
borrowers to take
control of debts

Preparing the monthly budget

Debt repayment proposal

Enhances borrowers
financial:

Formula for pro-rata payment

Knowledge

Sample debt repayment proposal

letters: single lender, multiple lenders
/full & final settlement

Behaviour
Attitude

Debt relief flowchart

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Wise Use of Credit Card

Tips on wise use of credit card
Recommend 2 cards only

Make full payment

Pay before maturity period

Avoid cash withdrawal

Debit Card
Quite similar to ATM card
Immediately deducted from your bank account
Can control spending
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Credit Card Guidelines

Effective 18/3/2011

Eligible age 21 years old & Income RM24,000 p.a.

Below RM36,000 p.a.

Credit cards from a maximum of 2 issuers

Max credit limit: 2 x monthly income per issuer

No increase in credit limit without consent

No credit advance via cheque payable to cardholders

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Credit Card Benefits

Convenient & efficient mode of cashless payment
Statements assist in tracking expenses for
budgeting purposes
Some credit cards provide free personal accident
& travel insurance coverages
Zero-interest installment plan, flexi-payment
scheme & balance transfer
Loyalty points to redeem goods & services
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Credit Card
Product Disclosure Sheet
NOTICE ON PAYING ONLY MINIMUM MONTHLY REPAYMENT
If you make only the minimum payment each period, you will pay
more in interest and it will take you longer to pay off your balance.
Please refer to the back page for more information. Alternatively, you
may also refer to the credit card calculator available on our website
or bankinginfo.com.my website.

Sample warning in last statement of year - wef Dec 2011

Total Credit
Total Interest
Total Finance Charges
Table on Minimum Payment Warning

Source: BNM

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Minimum Payment Warning

Outstanding balance

RM 3,000.00

Minimum payment due (5% of outstanding balance)

RM 150.00

Payment due date

15 Apr 2011

Minimum Payment Warning: If you make only the minimum payment each period, you
will pay more in interest and it will take you longer to pay off your balance. For
example:
If you make no additional
charges using this card and
each month you pay

You will pay off the balance And you will end up paying
shown on this statement in an estimated
about
total of interest of

Only the minimum payment

4 years and 8 months

RM 1,055

RM 200

1 year and 6 months

RM 424 (Savings RM631)

Source: BNM
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Credit Card Charges Example

Balance due :

RM5,452.40

Remaining balance:

Amount paid :

RM5,452.00

Total charges:

RM0.40
RM92.30

Partial payment resulted in loss of interest free period

Interest charged on transaction posting date to due date immediately

following statement date in which transaction was posted
Dining RM121.45 x 27/365 days x 15%

RM1.35

Purchase of Goods RM2,569.00 x 25/365 days x 15%

RM26.39

Others

RM19.75

Interest

RM47.49

Finance charges 28/1 to 16/2 RM5,452.40 x 20/365 days x 15% RM44.81

Total charges

RM92.30
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Financial Education Initiatives

1.

Publication of financial articles in newspapers, magazines, etc.

2.

Docu-drama based on real life cases 13 episodes

3.

Website (information and educational) - Online reference/response

4.

Publication of monthly E-Newsletters ReadSens

5.

Financial education at work place - briefings/talks at private & public entities

6.

Nationwide road shows, workshops, seminars & financial exhibitions

7.

Training of Trainers with smart-partners providing trainers & participants

8.

Distribution of informational booklets on banking & insurance

9.

Micro blogging on finance & credit issues at www.moneypower.my

10.

Personal Financial Management being offered as an elective/co-curriculum subject in 44

universities & 30 polytechnics

11.

University & polytechnic students attend POWER! Programme before graduation

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Managing Your Debts Effectively

Launched on 19 January 2011

Designed to equip young adults &

potential borrowers on how to
manage their debts effectively &
make informed financial decisions
Targeted education programme for
young adults (18-30 years old), firsttime borrowers & potential
borrowers, including hearing
impaired
Certificate of completion
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Programme Module
Module
Cash Flow
Management
Borrowing
Basics

Wise Usage of
Credit Card

Key Contents

Smart living: identify needs and wants

Develop personal budget & cash flow/net worth statement
Knowing financial position & net worth
Common sources of personal credit & key features of credit
facilities
Key lending criteria
Cost of borrowing & setting own debt limit
Rights & responsibilities of a borrower
Different types of cards - debit, credit & charge card
Understanding terms & conditions of credit cards
Using credit cards wisely
Responsibility to protect credit cards
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Programme Module
Module
Buying a Car

Key Contents
Factors to consider when buying a car - affordability,
maintenance expenses
Terms & conditions of hire purchase agreement - term
charges, early settlement & repossession

Buying a
House

Managing
your Debts

Contributions to over- indebtedness & consequences

Importance of building & maintaining good credit history
Available advisory & redress services

Affordability and types of house ownership

Understanding terms & conditions of house financing
Understanding rights & responsibilities of a borrower
Consequences of loan default

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Online Learning Portal: power.akpk.org.my

Useful for IT savvy young adults
Easy & convenient to learn money mgt

Learn at own pace & time

Lively, interactive & amusing animation

IQ games to make learning interesting

Virtual certificate of completion

As at 30/09/12 122,794 participants

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Thank You

Make Prudent
Financial Management
a
Way of Life
1 800 88 2575
www.akpk.org.my

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Credit Card Fees & Charges

Finance
charge for
retail
transaction

1.125% pm /13.5% pa if promptly settled min. payment due

for 12 consecutive months
1.333% pm /16.0% pa if promptly settled min. payment due
for at least 10 mths in a 12 month cycle
1. 458% pm /17.5% pa if payment record is not within
either above
1.5% / 18% pa for cash transaction

Cash
advance fee

5% of amount drawn, subject to min. of RM15.00, whichever

is higher

Late
payment
charge
Replacement
card

1% of total o/s amount, subject to min. of RM5.00 & max. of

RM50.00
RM10.00 for 1st time & RM50.00 for every subsequent
replacement
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Credit Card Fees & Charges

Request for card statement RM5.00 per monthly statement
Request for sales draft

RM15.00 per copy

PLUS/ CIRRUS ATM

withdrawal

RM10.00 for each cash withdrawal

PLUS/CIRRUS enquiry

RM2.00 for each transaction

Conversion for overseas

transactions

Rate determined by Visa /MasterCard /JCB

Government service tax

Bank imposes 1% administration fee

RM50 for each principal card
RM25 for each supplementary card
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