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KUALA LUMPUR, September 23 – Malaysians should turn to their banks for help as soon as possible before the end of the moratorium or temporary suspension of loan installments on September 30, local banks said today.
The local banking industry said today that borrowers should not postpone seeking help until the eleventh hour if they cannot afford their loans, as it would then be recorded that they were late in payments and would affect their credit standing.
CIMB CEO Datuk Abdul Rahman Ahmad said borrowers should reach out to banks now before they have difficulty making loan repayments when the moratorium ends on September 30, highlighting the multiple avenues in which borrowers Borrowers could seek help, such as through online platforms or by opening banks even on weekends and with more hours of operation in the weeks leading up to the end of the moratorium.
“Of course, if they don’t show up and the automatic moratorium ends, the fees will expire after September. Obviously, if they don’t make the payments, they will be delayed, and at that point, all banks will normally call them and do what we call the collection process.
“That’s why I think it’s very important that affected borrowers really reach out to the banks, otherwise we don’t know they need help. When the installment is due, if they don’t pay, it will be recorded as past due, ”she told reporters at a round table with senior officials and CEOs of six banks and the CEO of the Agency for Credit Counseling and Debt Management ( AKPK). .
Abdul Rahman emphasized that borrowers should contact or visit their banks as soon as possible before September 30 to agree on the arrangements for their loans, rather than go through the experience of being registered in the system as late in paying their loans. loans.
“Don’t wait until the amount is past due. Please reach out to us as soon as possible so we can help and provide assistance before this happens, ”he said.
Prevent CCRIS from posting late payments by getting help now
At the same event, Bank Islam CEO Mohd Muazzam Mohamed noted that some of the local borrowers are waiting until the “last minute”, with only an increase in the number of borrowers in the past two weeks amid the Intense efforts by banks to alert Malaysians of the offer to work out flexible arrangements for their existing loans.
“There could be some fencing keepers. Some are still waiting for the automatic moratorium to be extended, ”he said, noting that some can wait for the moratorium or freeze to be extended so that they have to pay the loan installments without doing anything.
But he said borrowers should not have such hopes, but rather ask banks for help in working out flexible loan repayments, rather than risk having the Central Credit Reference Information System (CCRIS) computerized database record their profile. credit as late in the payment of loan installments. .
“However, we want people to come sooner rather than later. Because at the end of the day, once you’re late, it shows up in the system, CCRIS is going to update, ”he said.
Bank Rakyat CEO Datuk Rosman Mohamed noted that some borrowers appear to be taking a “wait and see” approach or seek help at the “last minute”, but said they should not as the automatic moratorium on All loans would end on September 30.
He cautioned that borrowers should be aware that the amount of income they can spend would be reduced starting in October, as they would have to use their income to start repaying their loans.
“It seems that people are trying their luck. Most of our clients who are government employees, when October starts, we will start deducting wages. We are dealing with Angkatan Kerjasama Kebangsaan Malaysia Berhad (Angkasa) – automatically the salary will be deducted. People should be aware that their disposable income is much lower as of October, ”he said.
To date, 98 percent of the 380,000 borrowers who have applied for loan repayment assistance have received approval from such banks, and the banks have committed to helping and providing flexible repayment arrangements to individuals or businesses affected by Covid-19.
Banks are offering borrowers several options depending on their situation, including allowing them to pay only the interest on their loans for a certain period of time, or lengthening the loan period to reduce the amount of the installment to be paid each month.
Why the automatic loan default should not be extended
CIMB Chief Executive Officer Abdul Rahman noted the importance that the automatic freeze or moratorium on all loan repayments is not extended indefinitely and instead takes a specific moratorium approach for borrowers who actually need to pause loans. your loan repayments even after September 30.
Abdul Rahman, who noted that the automatic loan moratorium is still being called for, said, however, that stopping a blanket moratorium, where even those who do not need such financial assistance are not temporarily required to repay their loans, would allow Banks obtain the real data on which borrowers can or cannot make payments on their loans.
“Those who cannot pay, we will help them. There are no two ways to do it. But if we don’t have that data, it is very dangerous, because then all banks are not sure what the underlying quality (of the assets) is. And since we’re not sure, they won’t be able to lend or help the economy to recover.
“The economy can only recover if banks are strong and can make loans to people who want to borrow money, invest productively, buy houses and cars,” he said.
“With a specific moratorium, then we will know. We will help those in need, but then we are comforted that we can refocus our attention on really paying attention to the economy to ensure it recovers effectively from the pandemic. Because it is very populist to say ‘Let’s extend the moratorium’, but without understanding the impact on the underlying economy, “he added.
For any borrower who has lost his job at any time this year, Malaysian banks will offer a three-month moratorium on their loans, and borrowers will still be able to approach the bank if they still haven’t gotten a job after three. months and to work out more arrangements on the loan, he explained.
He said that, of course, borrowers would have to submit relevant documentation, such as a letter on termination of employment, noting that this is not to make things difficult for borrowers, but to allow banks to have proper documentation and sufficient to ensure that loan repayment assistance is not abused.
Regarding the local banking industry’s ability to cope with any economic downturn amid the Covid-19 pandemic, Abdul Rahman said: “Bank Negara has mentioned that Malaysian banks are well capitalized in terms of our ability to withstand shocks. crisis. I think we are in a much stronger position compared to the 1997 crisis that we faced. So I’m sure that if the pandemic is contained and the economy recovers and all the actions the government is taking to get the economy to grow again, I think all banks are resilient and will be able to resist and navigate these challenging times. ” .
