THE Association of Banks in Malaysia (ABM) is fully supportive of the proactive measures announced by Bank Negara Malaysia (BNM) on March 24 to mitigate the economic impact caused by the ongoing Covid-19 virus outbreak globally.
“ABM applauds the various initiatives taken by the government and BNM thus far in dealing swiftly with the crisis. We have from the outset been in discussion with BNM on possible measures that can be taken to address the impact of Covid-19, particularly looking at how borrowers can be provided relief even as the government focuses on combating the spread of the virus and ensure the country’s economic growth is sustained,” said ABM in a statement on March 25.
Recognising that the current situation is a health issue, which is affecting the behaviour and confidence of consumers and corporates, the banking industry believes that there needs to be unique solutions applied in this instance.
“ABM member banks were in full agreement with the intent of the moratorium announced by BNM, which it believes is a necessary solution at this point,” it said.
ABM members will grant, effective April 1, an automatic extension of credit facilities in existence today for six months to retail (excluding credit cards) and SME customers. While interest will accrue during this moratorium period, there will be no payment of interest and principal required for credit facilities for the six-month period.
“The moratorium is the best measure to provide the greatest assurance of job preservation in the midst of personal financial adjustment. It is also in the best interest of all that everyone is back to full employment,” said ABM.
In this regard, it anticipates that any adverse asset quality issues will be relatively temporary in nature.
In the meantime, ABM had presented a number of requests to BNM, specifically in respect of the recognition and classification of assets, policies regarding Malaysian Financial Reporting Standards (MFRS9), liquidity and capital, as well as market behaviour concerning deposit-taking activities.
ABM chairman and Maybank group president and CEO Datuk Abdul Farid Alias said, “The measures announced have been designed not only to support customers in this highly unusual global environment but also to ensure that banks can continue to play their role in sustaining the country’s economy.
“We hope it will provide customers with some breathing space and allow them to focus on other critical aspects of their livelihoods at this time.” – March 25, 2020
