Govt can't stop public servants from borrowing beyond their means: Azalina

PUTRAJAYA: It is not for the government to regulate public servants who take loans beyond their means and risk bankrupcy, said Minister in the Prime Minister's Department Datuk Seri Azalina Othman Said.

She said there had been a policy of disallowing public servants from taking loans of more than 60% of their income, but there was not much that can be done by the government if they applied for loans without consulting the head of department.

She added from 2013 to March this year, a total of 3,547 civil servants have been declared as bankrupt.

"If they are taking (loans) more than 60% of their income, that is how they interact individually between themselves and the creditors.

"This is beyond what the government can do. It is unfair to burden the government with policing public servants. This is a bit of a private matter," she told reporters after the launching of the MyDI smartphone application at the Legal Affairs Division building.

On Sunday, Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Datuk Azih Muda revealed that more than 49,000 civil servants may face the risk of bankruptcy due to failure in managing their loans.

He had said these civil servants had applied for personal loans from financial institutions but with repayment beyond their financial ability.

Meanwhile, Azalina said the newly-passed amendments to the Bankruptcy Act is expected to be implemented by next month, pending approval from the Yang di-Pertuan Agong.

She added the act would be renamed as the Insolvency Act once it was approved.

Azalina said about 292,000 Malaysians have been declared bankrupt as of today, but noted that the figure was not alarming.

"That was the total out of almost 30 million people in Malaysia. It is quite a low number," she said.