Another call to extend the six-month moratorium on loans and financing repayments has been made, but not from the public. This time, it’s from the Malaysian Trades Union Congress (MTUC), which urged the finance ministry (MoF) and Bank Negara Malaysia (BNM) to compel banks to extend the deferment by another six months, The Edge reports.
Failure to do so would see record asset forfeitures involving borrowers, it said. According to MTUC secretary-general J Solomon, the moratorium extension was needed, especially for the targeted group of workers who are still unable to service loans.
“This would include many of the 800,000 workers who lost their jobs until April this year, and thousands more who were forced to take deep pay cuts or go on unpaid leave by their employers,” he said, adding that it would take time for workers to get back on their feet and service their loans.
“There should not be any doubt on the part of the government, especially the MoF and BNM, that a large slice of the workforce is far from ready to resume servicing car and housing loans. If the banks persist to ‘collect’, then we can expect to see record forfeitures of vehicles and homes of the working class, which will inflict untold misery on them and their families,” he explained.
His statement was in response to news reports the cited BNM assistant-governor Adnan Zaylani Mohamad Zahid as saying that “we (BNM) have no intention of extending the moratorium as it would have repercussions that we want to avoid.”
Solomon said there is no question of banks incurring losses because of the moratorium. “The loans are not written off, but the instalment payments merely need to be 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.
Under the Prihatin Rakyat Economic Stimulus Package (Prihatin), BNM had on March 25 proposed measures to assist individuals, small and medium enterprises (SME) and corporates affected by Covid-19, in which an automatic moratorium on all loan repayments for six months was announced.
Those with hire purchase car loans or fixed-rate Islamic financing will enjoy a six-month relief, with only the duration of the tenure shifted by an additional six months. There is no change to instalment payments after the moratorium period ends, nor will there be any additional interest charged during the period, which is effective from April 1 to September 30.
In June, finance minister Tengku Datuk Seri Zafrul Abdul Aziz said it is up to banks to decide if they wanted to extend the loan moratorium. He had suggested that an extension of the moratorium could perhaps be done in a targeted manner and on a case-to-case basis.
Last week, Malayan Banking said it will not be extending its loan moratorium period past September, while AmBank says it is looking at extending the loan moratorium, but not in a blanket manner, with any possible extension being for targeted segments.
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