In line with the joint media statement by The Association of Banks in Malaysia (ABM), Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) and the Association of Development Finance Institutions of Malaysia (ADFIM) released on 2 December 2025, Public Bank will be offering goodwill discounts at the point of early settlement for existing fixed-rate hire-purchase agreements and/or which apply the Rule of 78 method, in anticipation of the implementation of the Hire-Purchase (Amendment) Act (HPAA).
The goodwill discount programme will be effective starting from the effective date of the HPAA, which is expected in the first quarter of 2026. The Bank will notify the customers once the HPAA has come into effect.
Who is eligible?
Individuals and micro or small businesses with fixed-rate hire-purchase agreements and/or which apply the Rule of 78 method:
- entered into before the HPAA takes effect; or
- entered into during the 18-month grace period allowed under the amended Act; and
- who choose to settle their hire-purchase financing early i.e. any time before loan or financing maturity.
Eligibility criteria
At the point of early settlement, accounts should:
- not be in arrears exceeding 90 days;
- not be under legal action or issued with repossession order; or
- not be under an existing restructuring and rescheduling (R&R) or enrolled in a formal debt management programme.
What is the discount?
- The goodwill discount will be calculated based on the features of the existing hire-purchase agreement (such as timing of early settlement and rate structure) and applied to the net balance due. The intention is to offer early settlement treatment that is broadly comparable to the approach under the amended Act.
- The exact calculation and amount of goodwill discount may vary by bank and by product, and will be explained to customers at the point of application for early settlement.
The details of the goodwill discounts and operational mechanism will be notified and implemented after the Hire-Purchase (Amendment) Act (HPAA) is gazetted.
