KUALA LUMPUR: The government has set the maximum interest rate for credit sales transactions at 15 per cent annually, effective January 1 2018, Domestic Trade, Cooperatives and Consumerism Ministry said.
Its Minister Datuk Seri Hamzah Zainudin told the Dewan Rakyat today that the ministry had amended the Consumer Protection Act 1999 and enacted the consumer protection (credit sales) regulations 2017 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 cent per year.
"Through the amendment, credit service providers may no longer impose interest rates above 15 per cent per year.
"The decrease in interest rates is hoped to be able to help the people, especially those who are underprivileged, to buy household items for their family," he said in reply to a question from Datuk Hasbullah Osman (BN-Gerik).
Hasbullah had asked on the ministry's efforts in tackling high interest rates that had burdened low-income consumers.
Hazmah said any credit service providers that violated the new regulations would face penalties.
"Corporate bodies would face a fine of not more than RM100,000 while repeating offenders would face a fine of 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," he said.