Malaysiakini

Individuals to undergo stress test when applying for new loans Economic growth of 5%-6% seen for 2011 with inflation closely watched KUALA LUMPUR: Individual borrowers will be subject to a stress test to gauge if they can afford a new loan once guidelines are introduced in the third quarter of this year. The new guidelines are designed to inculcate responsible lending practices by financial institutions when dealing with retail customers where borrowers will be subject to a suitability and affordability assessment and verification of income. Disclosure of terms and obligations of the loan would be improved and borrowers would be informed of the structure of the loan, charges such as stamp duty, implications of non or late repayment, risks associated with the product and any assistance of redress mechanism available to them. Borrowers would also be stress-tested in the event interest rates were to rise by 100 to 200 basis points from the time the loan is applied. Tan Sri Dr Zeti Akhtar Aziz showing the Bank Negara report at the media briefing.