The loan moratorium, as announced in MCO 1.0, had technical problems, confusing eligibility criteria and left out key details such as whether interest would be charged during the moratorium period and so on. This confusion should not have happened, and could be avoided if the details were ironed out between the Ministry of Finance, Bank Negara Malaysia and the banking sector, before the announcement on the moratorium was made.
The current moratorium, announced for MCO 3.0, should be automatic and for a period of 6 months with wider coverage. Not an opt-in moratorium solely for the B40 group, those who lost their jobs and small and medium enterprises (SMEs). Last year, in spite of the automatic moratorium for all, banks still recorded very good profits and this year, one bank already announced a profitable first quarter. Based on this, we urge banks to consider extending the moratorium facility to cover a wider range of customers and for a longer period. This is vital for the sake of sustainability and well-being of not only the rakyat but the nation in the long run. When your stakeholders are well, you – the banks – will be well as well.
This prolonged pandemic has affected all – B40, M40 and even T20 – with varying degree of difficulties. For the B40, the moratorium should be automatically given. For the M40 and T20, it should be on a case-to-case basis. There are those among the M40 and T20 who plan to use the grace period afforded by the moratorium and channel the funds from not serving their loans to help the B40 or Asnaf survive the hardships caused by the pandemic. This is commendable and should be encouraged by the government and the banks.
It is very disheartening to read the response from the Minister of Finance who reportedly said the government has no control over bankers and therefore, could not legally force or dictate what moratoriums banks could provide or how they are implemented.
Moral and legal obligations may be two different things. However, unprecedented times call for unsurpassed solutions.
By Assoc. Prof. Dr. Baharom Abdul Hamid
Dr. Baharom has commented on this issue on: https://dagangnews.com/lanjutkan-moratorium-minimum-6-bulan-bank-tidak-rugi-penganalisis-6260 and https://www.utusan.com.my/nasional/2021/06/perluaskan-moratorium-kepada-m40-t20/