'Minister wrong in saying govt can't force banks to provide loan moratorium'

 

Finance Minister Tengku Zafrul Abdul Aziz was wrong to assert that the government has no legal power to compel banks to offer borrowers a blanket moratorium on loan repayments, according to the lawyer Mohamed Haniff Khatri Abdulla.

With the state of emergency still in force, Haniff (above) said the government merely has to enact an emergency ordinance that would give it the power to enact the emergency ordinance.

He noted that by wielding its emergency powers, the government has already suspended parliamentary proceedings, approved expenditures without tabling them in Parliament and allowed itself to seize private property, if needed, to help control the Covid-19 pandemic.

“All these are allowed, even though they appear to be wrong. Of course, there is no check-and-balance, but these actions are allowed under the state of emergency.

“So, it is completely false for him (Tengku Zafrul) to say they don't have power. I would stress it is false. It is a lie to the public,” Haniff told Malaysiakini yesterday.

He said the ordinance could be “one simple ordinance” that stipulates that all financial services of a certain amount are suspended in the repayment, late payment penalties and so on, for a specific period of time.

"In this way, the government can compel banks to grant a moratorium on loan repayments in whatever terms it sees fit, and this can be limited to certain facilities if needed," Haniff added.

On May 31, on the eve of the total lockdown, Prime Minister Muhyiddin Yassin unveiled an RM40 billion economic aid dubbed Pemerkasa Plus, in which targeted loan moratorium was granted to the bottom 40 group as well as those who have lost their jobs and small businesses that cannot operate during the total lockdown.

This is different from the blanket moratorium on loans given to the general public when the country first entered the movement control order (MCO 1.0) in March 2020.

Umno leader Puad Zarkashi has questioned why the government did not provide a blanket loan moratorium as the total lockdown would impact everyone.

In his explanation yesterday, Tengku Zafrul said the targeted loan moratorium was the result of the discussion between the banks and Bank Negara Malaysia.

He claimed that the government has no legal ability to force banks to do so. - Mkini