PETALING JAYA: Bank Negara Malaysia (BNM) should extend the six-month loans repayment moratorium that ended last month to prevent more job losses and businesses going bust, said businessmen and other concerned citizens.
They told theSun the central bank should show firm leadership by at least extending the moratorium for another three months, as the economy has hardly recovered since the onset of the Covid-19 pandemic early this year and amid signs of an unprecedented spike in new infections.
“While most businesses were hard-hit and many having closed for good resulting in massive retrenchment of their employees, the country’s 10 banks continue to enjoy hefty after-tax profits by the billions.
“Banks are making so much money even when others are suffering. What is wrong with them reducing their huge profits when the borrowers of loans are losing their jobs by the thousands?” said one prominent businessman.
Even if banks were to halve their after-tax profits or break even, they would still be far better off than other sectors of the economy, said another businessman.
He said of the 10 local banks, at least five are owned directly or indirectly by government-linked entities like the Employees Provident Fund (EPF), Khazanah Nasional, Permodalan Nasional Berhad, Tabung Haji and a few other government-linked corporations.
Another corporate personality also appealed to the government not to allow Malaysia Airlines, AirAsia and more hotels to close down resulting in unfeterred job losses.
“When the economy recovers in six months, these airlines and hotels can get back on their feet again and so the Ministry of Finance needs a plan to tide them over the situation. It’s not rocket science at all,” he said.
A former senior bank executive said BNM should make a firm decision on extending the moratorium instead of leaving it to individual banks to work out mutual arrangements with borrowers, especially those having housing and car loans.
“This is the time for Bank Negara to exert its leadership. I have heard many cases of individual banks threatening borrowers with declaring them bankrupt if they don’t pay up. These are not normal times and Bank Negara should intervene,” she said.
Not surprisingly, their appeals for extending the moratorium has found support from a former chief executive officer of a major bank.
“The banks can afford to be more accommodative to viable businesses which suffer temporary cash flow problems. It should not, however, be carte blanche as at the same time, we want to avoid the inevitable. The banks have to come out with a template or formula on how to determine business viability and make it transparent to their customers so there will be no issue of favouritism,” he told theSun.
Others interviewed pointed out that the central bank should be “more sensitive” towards the genuine hardships faced by the rakyat, especially borrowers from the B40 group, with the worsening economic and pandemic situation.
The situation has also been aggravated and made bleaker by the ongoing tussles among selfish politicians bent on jostling for power as well as attempting to topple the government via a confidence vote in Parliament, they added.
A random survey among some housing and car loan borrowers showed that they were doing everything possible to save their housing loans given the fact that such loans were their biggest personal investment and homes being a basic need for their livelihood.
“Most don’t quite mind giving up car loans but not housing. So we appeal to banks to bear with us on the current hardships we are facing by agreeing to ease our burden,” said a borrower.
Several public transport entrepreneurs have also joined the appeal for an extension of the moratorium.
Their spokesman, Mohd Rofik Mohd Yusoff, said almost 90% of bus operators with bank loans were experiencing serious cash flow problems due to a sharp drop in passenger load, which was worsened by the new conditional movement control order imposed in Selangor, Kuala Lumpur, Putrajaya, Labuan and Sabah.
“The pandemic has heavily impacted our rice bowl and most cannot afford to repay loans, and many have had their vehicles repossessed or are near bankruptcy while others have been dragged to court.
“Under these circumstances, it is almost certain that our bus industry is on the verge of being crippled. So we appeal to the government to provide us with a special grant to sustain the public transport business,” said Mohd Rofik, who is president of the Malaysian Chartered Bus Operators Association.
Meanwhile, prominent social activist Datuk Seri Akhbar Satar said priority for the moratorium extension and provision of repayment flexibility should be given to individuals who lost their jobs and have yet to find a job.
In addition, small and medium enterprises especially are facing acute cash flow problems due to interrupted business and most were hardly managing to keep afloat.
“Worse, some are hardly able to meet overhead expenses. How then can they meet their obligations to the banks?” said Akhbar, who is president of the Malaysian Association of Certified Fraud Examiners and a leading anti-corruption activist.
He said a vicious circle would set in when default of loan repayment occurs as the borrower would not be able to obtain further loans with depleting reserves.
