Najib calls on banks to make sacrifices, extend loan moratorium

PARLIAMENT | Former prime minister Najib Abdul Razak has called on banks to make sacrifices by extending the loan moratorium period.

Debating the King's address in the Dewan Rakyat today, he said this would actually serve the banks' interest in the long term.

"This is the time for banks to sacrifice, so their customers are not affected and can still return billions and billions in profit to the banks in the future when the Covid-19 crisis is over," he said.

Putrajaya had imposed a six-month loan moratorium from April to September where borrowers won't need to repay their loans during this period.

Bank Negara and other banks have indicated that it is unlikely to be extended.

Najib (BN-Pekan) said the government must be firm and not bend to the demands of the banks alone.

"We have to understand, the government has considerable powers over the banks in Malaysia - whether in the form of share ownership, low-cost fund injection, banking guidelines, or relevant laws."

He said if banks are reluctant to extend a full moratorium, they should consider asking their borrowers to only pay on interests.

Najib, who was a former finance minister, said that if requests for new loans have dropped, there is no need for banks to demand their customers pay the principal payment too.

He said if a bank has reduced profit this year, for example from making RM5 billion in profit to just RM1-2 billion, this would not cripple the country's financial system.

Meanwhile, Najib also urged the government to table a motion to raise the debt ceiling from 55 percent of the GDP.

This is to give the government the fiscal space to spend in an effort to fight the impact of the Covid-19 pandemic. - Mkini