KUALA LUMPUR, July 11 — A six-month bank loan moratorium announced as part of the National Recovery Plan (NRP) will only be effective if the government ensures the deferment comes without the accrued principal interests, said former finance minister Lim Guan Eng.
The Bagan MP stressed that the moratorium is meant to alleviate the financial strains of those already cash-strapped by the pandemic and that it would be counterproductive if borrowers are still charged interest on their deferred installments during the moratorium.
“How does that help borrowers facing reduced income or the moral hazard of banks not requiring to take any ‘hair cut’ or contributing the corporate social responsibility of sharing in the financial hardships faced by the borrowers?
“Both the government and Bank Negara must be reminded that the current financial distress faced by borrowers is caused by the Covid-19 pandemic and not of their doing.
“And yet, borrowers are required to foot the bill despite reduced income whilst banks can still enjoy their healthy profits as normal,” the DAP secretary-general said in a statement this morning.
He said the already dire situation among SME and micro-SMEs is only being exacerbated with the lopsided moratoriums by banks, whom he said still reported post-tax profits of RM32.3 billion and more than RM23 billion in 2019 and 2020 respectively despite the pandemic.
Lim even pressured newly appointed National Recovery Plan (NRP) Coordinating Minister Datuk Seri Tengku Zafrul Abdul Aziz, who prior to his Cabinet position was the Group CEO of CIMB Bank, to press banks to waive the principal interests on loans as was done during the moratorium announced last year.
“The time has come for the Perikatan Nasional government to act boldly and instruct Bank Negara to direct the banking industry to waive interest during the bank loan moratorium except for the top 20.
“Otherwise, any NRP that seeks to offer financial help, will be meaningless and an exercise in futility, serving to protect the profits of the banks at the expense of eight million Malaysian individuals and companies seeking assistance from the loan moratorium,” Lim wrote today.
On Friday, the Prime Minister’s Office announced Tengku Zafrul’s appointment as the NRPs’ coordinating minister, with him responsible for monitoring the implementation of strategy, aid, and taking intervention measures that are proactive and suited to the dynamic Covid-19 pandemic situation.
The Finance Ministry’s unit for the economic stimulus implementation and coordination between national agencies (Laksana) was appointed as the secretariat for NRP’s special committee, to coordinate the efforts of all ministries and agencies directly involved in the National Recovery Plan.
Source: https://www.malaymail.com/news/malaysia/2021/07/11/guan-eng-govt-must-instruct-banking-industry-to-waive-principal-interest-du/1988956