Moratorium or not, banks will win, says Najib

 

Tengku Zafrul Aziz says the government must reimburse banks if a moratorium is ordered, prompting Najib Razak to say banks benefit either way.

PETALING JAYA: Former prime minister Najib Razak said banks will profit regardless of whether Putrajaya forces them to impose a loan moratorium or not.

This came after finance minister Tengku Zafrul Aziz told Sinar Harian that the government would have to “gratuitously” reimburse banks if Putrajaya insisted on a blanket moratorium being offered.

Najib said that if the government does not instruct banks to offer a moratorium, despite having the authority to do so, these financial institutions would profit.

“If the government wields its power and directs banks to impose a moratorium, the government would need to reimburse them — and the bank will also profit,” he said in a Facebook post.

Calls for banks to impose a moratorium on loans have grown louder following the latest round of stricter movement restrictions, which saw only “essential” sectors operating.

Zafrul had initially said that the government did not have any legal force to dictate what moratoriums banks can provide or how they are implemented.

However, detractors argued that there were several laws that gave the government such authority, including the Emergency Ordinance and the Bank Negara Malaysia Act 2009.

In an exclusive interview with Sinar Harian, Zafrul said while the Emergency Ordinance had given the government authority to force banks to impose a moratorium, it also stipulated that the government must reimburse the banks.

“Forcing them to impose a moratorium means the government would have to bear the cost of reimbursing the banks for something that is not needed.

“I would rather channel the resources (the reimbursement cost) to help the people and businesses,” he was quoted by the Malay daily as saying. - FMT