Malaysia Proposes New Framework for Banks to Price Mortgages

Malaysia’s central bank plans to introduce a new reference rate framework for banks to price their consumer loans to better reflect market conditions.

The proposed changes would stop lenders from offering debt at discounts to base lending rates, according to a concept paper released by Bank Negara Malaysia today. It would also boost transparency and ensure charges better take into account institutions’ lending costs, funding structures and statutory reserve requirements, it said in a statement.