Banks in Malaysia are notorious for not giving and approving loans, be it personal loans or business loans to customers. Banks in Malaysia will scrutinise every details of your past financial histories before deciding to give you the much awaited and much anticipated loans. If you have bad financial records like non performing loans, non payment of any type of loans, housing loans, car loans, personal loans, wedding loans and credit cards, then you can forget about your loan applications.
Merchant and Commercial Banks have solid connections with Bank Negara Malaysia, the central bank of Malaysia. Bank Negara in turns has all your financial records known as CTOS or CCRIS which stands for Central Credit Reference Information System.
CCRIS is a system that collects credit information on borrowers from financial institutions and supplies the information back to them. This is one of the sources of information used by financial institutions to help them establish a view of the credit histories of potential or current borrowers. Bank Negara Malaysia says in it's website that CCRIS is not a blacklist system as perceived by some people, but to me CCRIS is the blacklist system indeed. CCRIS is the Banks' Angel of Death!
Bank Negara Malaysia created CCRIS because one of its functions is to regulate and supervise the financial institutions so that the financial system of the country would be sound and stable. As such, the Bank promotes prudent credit policies and professionalism among the financial institutions, including the adoption of best business practices in credit risk management. One way of doing this is by providing CCRIS to the financial institutions so that they can make faster and better informed lending decisions.
The shocking truth is that, many professionals such as lawyers and VIPs failed in obtaining loans from the various banks in Malaysia.
As such, they resorted to borrowing money from legal and illegal money lenders known locally as "Ah Longs" or Loan Sharks.
These Ah Longs easily give you loans for any purposes in one day, without asking much questions. The only things that matters is that you pay the interests and base lending amount, in the agreed time. Failure to do so will result in severe 'penalty'!
So you get your loans but the price is damn expensive, you have to pay much much higher interests rates, sometimes 10 % daily or 10% per month, depending on the Ah Longs.
Sometimes it is ridiculous because if you borrow RM1,000 from these Ah Longs, the total amount that you have to payback to settle your loan is RM10,000 or RM100,000.!!
But you are left with no choice if you are in dire need of money.
Money loaned from Ah Longs is best used for good purposes only. Investing them in immoral activities like gambling always result in tragedies like committing suicide as being reported by the media many many times before.
People who borrowed from Ah Longs come from many walks of life, be it ordinary workers, middle income earners, high income earners and professionals like lawyers.
This was proven in a news report, published by The Star today, 4th October 2011.
The story reported that the Malaysian police recently busted and arrested 2 Ah Longs who catered to upmarket clients and only gave out loans exceeding RM200,000.
Police were surprised to discover that their clientele included top businessmen and professionals.
Sources said police found a ledger with more than 200 names of prominent businessmen, lawyers and other professionals when they arrested the two money lenders.
It is learnt that they charged an interest rate of 10% for every 10 days.
The two, aged 37 and 38, are believed to have given out loans totalling more than RM10mil based on the record of loan transactions over a period of two years.
The duo are known to use several harassment tactics including making threatening calls and visiting the homes of victims and forcing their family members to pay up.
Following a complaint, a surveillance team observed the duo's operations and they were arrested near a hotel in the city on Sept 29, 2011.
A Toyota Camry which belonged to them was also seized and numerous bank slips were discovered inside, the news report said.
Police investigations are ongoing and did not rule out that Datuks (prominent titles given to VIPs) and other prominent figures might have also borrowed from the duo.
Police are also investigating if the suspects were involved in other criminal activities.
The case is being investigated under the Money Lenders Act 1951.
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