No compound interest during 6-month moratorium period

Finance Minister Ibrahim Ameer (L) with CEO of Bank of Maldives (BML)Timothy Sawyer (R). (Sun Photo/Fayaz Moosa)

Finance Minister Ibrahim Ameer, on Sunday, clarified that Bank of Maldives (BML) will not charge any compound interest during the six-month moratorium period which has been granted on its loans.

The Maldivian government has announced a MVR 2.5 billion economic stimulus package to mitigate the economic impact of the COVID-19 pandemic. One of the components of the package is to defer the payment of loans taken out by businesses and individual citizens from the national bank, BML, by six months.

Many have questioned whether the deferment did or did not entail the payment of compound interest, once the six-month moratorium period was over.

Minister Ameer clarified the confusion over the calculation of the interest during the six-month moratorium period in a statement over his Twitter account this Sunday afternoon.

He said that the BML would “not charge interest on interest during the 6-month moratorium period”.

It means that while the principle interest will continue to be charged, compound interest will not be charged.

Ameer added that BML had been doing their utmost to help their customers and Maldives according to the best of their ability, and as per the international standards that the bank must follow and adhere to.

He said the government would continue to monitor the situation as it unfolded.

“This is all while ensuring the continued operations of the bank throughout this difficult and uncertain period,” he said.