Base Rate vs BLR in Malaysia: How Does BR Work?

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Effective January 2, 2015, the Base Lending Rate (BLR) structure was replaced with a new Base Rate (BR) system. Under BR, which will now serve as the main reference rate for new retail floating rate loans, banks in Malaysia can determine their interest rate based on a formula set by the central bank.

Under the previous BLR, the rate was set by Bank Negara Malaysia (BNM) based on how much it costs to lend money to other financial institutions. Meanwhile, the cost to borrow money was determined by the Overnight Policy Rate (OPR) set by central bank.

With the new BR, interest rates are determined by the banks’ benchmark cost of funds and Statutory Reserve Requirement (SRR). Other components of loan pricing such as borrower credit risk, liquidity risk premium, operating costs and profit margin will be reflected in a spread in the new BR framework.

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BNM decided to raise the OPR by 25 basis point, so…?

Yesterday morning I sent out an email (shown at the below) to my JefferyLam.com Community, and I got some immediate feedback and reply from them like:-

Positive people with positive mind. Busy n hectic life if always for smart n business minded proffesional like you. You hv your clear mission n objective in mind , so nothing will stop you from achieving your goal. Your parents will be very proud of you. Keep up your momentum n success is just the matter of time.

Very interesting of your encountering stories in a Monday morning

Boss, i enjoy reading your story.

and etc…..

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