Why is Bank Negara so coy about moratoriums, asks Sim

 

Bukit Mertajam MP Steven Sim has questioned why Bank Negara continues to remain silent on the loan moratoriums one week after the initial announcement by Prime Minister Muhyiddin Yassin.

“A week after the PM’s announcement, there is still no statement made by Bank Negara on how the moratorium will be carried out this round.

“Does this mean that the government will leave it completely to the banks to decide how the moratorium is to be implemented?

“Is each bank free to set its own eligibility criteria, interest calculation, repayment period and so on?

“If so, will the banks be on the side of the people when the PM himself has issued statements on how he looks to protect the interests and profits of the bank several times?” said Sim in his statement today.

Last week, Muhyiddin announced that a six-month automatic bank loan moratorium is to be reinstated on an opt-in basis for individual borrowers, whereas applications from small and medium enterprises (SMEs) remain subject to bank approval.

The loan moratorium - which is set to start on July 7 - is part of the government’s RM150 billion stimulus package in response to the current movement control order as previously, the loan moratorium was only reserved for the B40 (bottom 40 percent of income earners).

However, despite Muhyiddin’s announcement, a lack of clarity from the central bank continues to raise questions.

Prime Minister Muhyiddin Yassin

Malay Economic Action Council (MTEM) senior fellow Ahmad Yazid Othman was reported as criticising this latest moratorium for being “too simplistic” and “vague”, saying there was much confusion regarding its implementation.

Issues of contention raised by borrowers included concerns about the need for clarification on eligibility criteria, confusing calculation of interest rates and hidden banking charges.

Sim, however, reminded that the moratorium does not come unconditionally, noting the moratorium is still subject to interest throughout the grace period.

“The people have demanded an automatic moratorium since last year because they can no longer afford to pay for their bank loan repayments.

“When the moratorium was finally announced, those who were most unable to repay these months of loan payments found that they did not qualify for the moratorium.

“So what is the function of this latest moratorium?” asked the Bukit Mertajam MP.

Although the loan moratorium is not interest-free, Finance Minister Tengku Zafrul Abdul Aziz has told banks to waive compounded interest and late penalty fees. - Mkini