Guan Eng repeats call for another round of bank loan moratorium

 

Bagan MP Lim Guan Eng has reiterated his call for the government to extend the bank loan moratorium and interest rate waiver for another six months.

The former finance minister first made the suggestion in January but this time he cited uncertainties caused by the Russia-Ukraine war for the country’s softened growth forecast, despite the reopening of Malaysia’s borders this month.

Lim noted that the World Bank recently lowered the country’s gross domestic product (GDP) growth forecast for the year from 5.8 percent to 5.5 percent.

“For this reason, the government should help the business community to weather rising costs coupled with lower than expected economic growth by extending the bank loan moratorium and interest rate waiver for another six months,” he said in a statement today.

The loan moratorium has provided relief of at least RM80 billion which benefited 8 million individuals and companies, he added.

‘Banks can afford it’

The banking industry can afford to do so, he argued, after recording healthy pre-tax profits of RM41.5 billion in 2019, RM28.5 billion in 2020 and RM33.7 billion in 2021.

According to the DAP chairperson, the RM28.5 billion in 2020 was recorded in spite of the RM6.4 billion it cost the banking industry to bear the loan moratorium in the first series of total lockdowns.

“Clearly, bearing the costs of the loan moratorium and the interest cost waiver has not affected the profitability of banks.

“However, much-needed assistance and relief from the loan moratorium and interest rate waiver will help individuals and businesses, especially small and medium enterprises (SMEs), to allow them to recover from Covid-19 and overcome the economic recession,” he said.

The loan moratorium period and interest rate waiver ended last month on March 31.

Since the start of the pandemic in 2020, Putrajaya has allowed two rounds of bank loan moratoriums. - Mkini