Extend loan moratorium, MTUC urges Bank Negara

THE Malaysian Trades Union Congress (MTUC) today urged the Finance Ministry and Bank Negara Malaysia to compel banks to extend the loan moratorium by at least another six months, especially for the 800,000 workers who lost their jobs since April.

MTUC secretary-general J. Solomon said it is cruel for banks to adopt a “business as usual” attitude and expect jobless Malaysians to resume paying their loans.

Yesterday, Bank Negara said it was unlikely that financial institutions would extend the six-month moratorium on loan repayment for vehicles and housing. The moratorium is expected to end on Sept 1.

Assistant governor Adnan Zaylani Mohamad Zahid had said “we have no intention of extending the moratorium as it would have repercussions that we want to avoid.”

Finance Minister Tengku Zafrul Abdul Aziz on June 28 said it was up to the banks to extend the loan moratorium in a targeted way.

“If the banks persist to ‘collect’, then we can expect to see record forfeitures of vehicles and homes of the working class,” said Solomon in a statement today.

“The same extension should also be given to companies with loan facilities who are struggling to keep afloat during this pandemic.”

Bank Negara had said the six-month moratorium would cost financial institutions some RM47.5 bil.

“The loans are not written off but the instalment payments merely deferred until the economy normalises. There are no losses to speak of, merely a temporary deferment of monies that would be returned to the banks coffers,” he said.

“If at all only a reduction in profits is possible due to loss of reinvestment interest and liquidity cost. What cannot be comprehended is as to how the Bank Negara arrived at the RM47.5 bil loss arising only due to liquidity cost.”

According to MTUC, Bank Negara figures show that the banking system excess capital and liquidity stands at RM159 bil and RM199.6 bil respectively above the regulatory minimum levels.

This has enabled banks in Malaysia to play a leading role in assisting households and businesses to recover from the Covid-19 pandemic shocks, Bank Negara had said.

“By compelling these workers to resume paying their loan instalments from October, the banks and the government will only be destroying the goodwill and credibility they had earned thus far in the eyes of the rakyat,” said Solomon. – July 4,2020

 

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