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Govt, banks can afford another 6-month moratorium, says Guan Eng

01 Aug 2020 / 14:59 H.

PETALING JAYA: DAP regrets that the government has decided not to extend the loan moratorium in full by another six months, claiming that the administration and banks are more than capable of doing so.

Its secretary-general, Lim Guan Eng, said a six-month extension would only cost banks RM6.4 billion, an amount he said was relatively small compared to what the financial institutions earn annually.

“This is a small price to pay for the banking industry when it earned an estimated RM32 billion in after-tax profits for 2019.

“RM32 billion should provide sufficient cover for banks to bear the RM6.4 billion cost of delivering on their corporate social responsibility of extending loan moratoriums by another six months to aid their customers during the Covid-19 economic crisis.

“Even if the banks are unwilling to cough up the RM6.4 billion, the federal government can bear the cost of RM6.4 billion to aid the 7.7 million individual borrowers and 245,000 small and medium enterprises (SMEs),” he said in a statement today.

According to Lim, the RM6.4 billion is small compared to the tens of billions of ringgit in additional loans that have already been spent to finance the various economic stimulus packages.

“Failure to do so would only give rise to suspicion that the RM295 billion stimulus package to battle the economic crisis is only heard but not felt, benefiting certain well-connected groups but not ordinary Malaysians and SMEs,” he said.

Last Wednesday, Prime Minister Tan Sri Muhyiddin Yassin had announced that banks would offer a three-month loan moratorium extension, although it would only be for those who had either lost their jobs or faced salary cuts, while affected businesses could make similar arrangements.

The current six-month moratorium which benefits all Malaysians will end in September, with many analysts predicting this could lead to more companies going under and more people losing their jobs.

Previously, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz had said that banks are estimated to suffer up to RM6.4 billion owing to the six-month moratorium.

However, Lim pointed out that this moratorium was necessary as it mainly benefits low and middle-income groups, many of who do not have enough savings.

The Bagan MP also noted that apart from a lack of moratorium extension across the board for all Malaysians, there has also not been any increase to the RM2.1 billion Geran Khas Prihatin, where RM3,000 is given to each of the 700,000 over SMEs in the country.

“Similarly there is also no extension of the wage subsidy programme to assist workers until end of March 2021. With the unemployment rate soaring to 5.3%, such an extension is needed now to save jobs. Why wait to assist workers only after jobs are lost?” he said.

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