The Domestic Trade, Cooperatives and Consumerism Ministry announced the maximum interest rate for credit sales transaction at 15% per annum.
This maximum interest rate set by the government will come into effect January 1, 2018.
Datuk Seri Hamzah Zainuddin, minister of Domestic Trade, Cooperatives and Consumerism, said the Consumer Protection Act 1999 has been amended and the consumer protection (credit sales) regulations 2017 has been enacted to address high interest rates in credit transactions.
“Based on several consultation sessions with the industry, we have found that current interest rates could go as high as 35% per year.
“Through the amendment, credit service providers may no longer impose interest rates above 15% per year.”
He added that the move aims to help people, especially those who are underprivileged, to buy household items for their family.
Any corporate bodies providing credit services that violated the new regulations would be fined not more than RM100,000 while repeating offenders would be fined not more than RM200,000.
Individuals or those who are not corporate bodies, would face a fine of not more than RM50,000 or a jail time of not more than three years, or both, while repeating offenders would face a fine of not more than RM100,000 or imprisonment of not more than five years, or both.
Hazmah’s reply was in response to a question from Datuk Hasbullah Osman (BN-Gerik) on the ministry’s efforts in dealing with high interest rates that had burdened low-income consumers.