BANK NEGARA URGED TO HELP DEFAULTERS

Bank Negara Malaysia should help defaulters of the popular ‘Bai Bithaman Ajil’ (BBA) home financing so that consumers who have put their faith in Islamic financing are not short-changed. Consumer’s Association of Penang (CAP) president S. M. Mohamed Idris said presently the defaulters ended up worse than defaulters of other conventional housing loans as BBA was an Islamic home financing where interest was not allowed to be charged. International Islamic University Malaysia’s Dean of the Institute of Islamic Banking and Finance Prof Ahmed Kameel Mydin Meera said under the BBA, the borrower was initially deemed to have sold the property to the bank under the loan agreement. Mohd Idris urged Bank Negara to protect Islamic banking by regulating the rebates the banks could give to BBA defaulters so that their outstanding balance could be significantly reduced given the current global financial meltdown where more people were expected to default on loans in the coming months.