Page 22 - FIN435 RHB vs BPMB

II. Credit facilities

RHB Bank Berhad also provides credit facilities to the customers. There are two types credit
facilities that RHB Bank provided which is short-term loans and Long-term loans. The first
product that are under short-term loans is overdraft.

1. Overdraft
Overdraft is a revolving credit that remain open as long as the borrower handles the account
in a satisfactory manner and comply to the terms and conditions stipulated by RHB Bank
Bhd. As such, the facility is subject to periodic review and repayable on demand. Overdraft
also generally used for personal consumption and it provides flexibility to the borrower to
utilize and to repay at any time needed riding on the Current Account. Our pledge
unencumbered ASB/ASW certificates to apply OD/TL with following criteria: 95% financing
for business purpose and 67% financing for personal consumption. The characteristics of
overdraft by RHB Bank offers to their customers are up to RM95 000 for overdraft limit, up to
95% margin of financing, repayment based on periodic review and payable on demand, ASB
Board Rate is KA + 2.20% p.a., Current Base Rate is 3.90% p.a. and effective lending rate is
6.10% p.a. Under this product, there are some charges RHB bank charged to their customer
which is first is insurance of RM10 for Letter of Offer, second is Commitment Fee 1% per
annum only for above RM250 000, third is Endorsement Fee depends on facilities and lastly
other Fees, Taxes and Expenses. The advantages and disadvantages of overdraft are
shown below.

ADVANTAGES DISADVANTAGES
 It is flexible cause can borrow only  Need to pay an arrangement fee if
what we need at the time which may want to extend overdraft period.
make it cheaper than a loan.

 It’s easy and quick to arrange.  The bank could charge if exceed
overdraft limit without authorisation.

 There Is no charge for paying off the  The bank has the right to ask for
overdraft earlier than expected. repayment of your overdraft amount
at any time.

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