This is to help prevent debt from spiralling upwards for a borrower who has problems repaying even the minimum payments on his existing debts.
MAS’ restriction applies only 60 days after the minimum payment due date. This provides a borrower time to make good on his minimum payments. If a borrower is unable to pay even the minimum payment within this time, it is a signal that his level of debt is unsustainable.
The restriction does not apply to unsecured loans for medical treatment, education and business.¹⁵
In addition, FIs are allowed to reinstate the suspended credit lines when the borrower repays the minimum payments due, and after conducting fresh income and credit bureau checks. The borrower does not have to repay all his outstanding debts fully before his credit lines can be reinstated.
