Bank Negara Malaysia (BNM) has denied any directive to the banks to increase interest rate on hire-purchase financing for cars.

BNM in a statement today said there is no directive from the central bank to raise car financing interest rates.

“Financial institutions set their own lending rates determined by various factors including a financial institution’s assessment of a borrower credit standing, market funding rates and competitive considerations,” it said.

A local financial newspaper today reported interest rates on hire purchase loans have increased by about 40 basis points for both national and non-national cars in the last two weeks.

The newspaper said according to bankers, the increase was an “order” by Bank Negara Malaysia, partly driven by concerns that non-performing loans for motor vehicles were on the rise.

- Bernama