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PETALING JAYABank Negara Malaysia (BNM) should extend the six-month loan repayment moratorium that ended last month to avoid further job losses and business bankruptcies, businessmen and other concerned citizens said.
They told the Sun that the central bank should show firm leadership by at least extending the moratorium for another three months, as the economy has barely recovered since the start of the Covid-19 pandemic earlier this year and amid signs from an unprecedented increase in new infections.
“While most businesses were hit hard and many closed for good, resulting in a massive downsizing of their employees, the nation’s 10 banks continue to enjoy significant after-tax profits in the billions.
“Banks are making a lot of money even when others are suffering. What’s wrong with them cutting back on their huge profits when loan borrowers are losing their jobs by the thousands? “said a prominent businessman.
Even if banks cut their after-tax earnings in half or breakeven, they would still be far better off than other sectors of the economy, another businessman said.
He said that of the 10 local banks, at least five are directly or indirectly owned by government-linked entities such as the Employees Provident Fund (EPF), Khazanah Nasional, Permodalan Nasional Berhad, Tabung Haji and some other government-linked corporations.
Another corporate personality also called on the government not to allow Malaysia Airlines, AirAsia and more hotels to close, resulting in unrestricted job losses.
“When the economy recovers in six months, these airlines and hotels will be able to recover again, so the Ministry of Finance needs a plan to overcome the situation. It’s not rocket science at all, ”he said.
A former senior banking executive said BNM should make a firm decision on extending the moratorium rather than letting individual banks work out mutual agreements with borrowers, especially those who have home and auto loans.
“This is the time for Bank Negara to exert its leadership. I have heard many cases of individual banks threatening borrowers with bankruptcy if they do not pay. These are not normal times and Bank Negara should intervene, ”he said.
Not surprisingly, his appeals to extend the moratorium found the support of a former CEO of a major bank.
“Banks can afford to be more accommodating to viable businesses that suffer from temporary cash flow problems. However, it should not be carte blanche as, at the same time, we want to avoid the inevitable. Banks have to come up with a template or formula on how to determine commercial viability and make it transparent to their clients so that there is no problem of favoritism, ”he told the Sun.
Other interviewees noted that the central bank should be “more sensitive” to the real difficulties faced by the Rakyat, especially B40 borrowers, with the worsening economic and pandemic situation.
The situation has also been aggravated and made more bleak by ongoing bickering between selfish politicians hell-bent on fighting for power and trying to overthrow the government by a vote of confidence in parliament, they added.
A random survey of some home and auto loan borrowers showed that they were doing everything they could to save their home loans since those loans were their biggest personal investment and homes were a basic necessity for their livelihood.
“Most don’t mind giving up car loans, but not home loans. Therefore, we call on banks to join us in the current difficulties we face by agreeing to ease our burden, ”said one borrower.
Several public transport businessmen have also joined the call for an extension of the moratorium.
Its spokesman, Mohd Rofik Mohd Yusoff, said that nearly 90% of bus operators with bank loans were experiencing serious cash flow problems due to a sharp drop in passenger load, which was exacerbated by the new order of conditional motion control imposed in Selangor, Kuala Lumpur. Putrajaya, Labuan and Sabah.
“The pandemic has heavily impacted our rice bowl and most are unable to repay loans, and many have repossessed their vehicles or are close to bankruptcy, while others have been taken to court.
“In these circumstances, our bus industry is almost certainly on the verge of being paralyzed. So we are calling on 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 that priority should be given to extending the moratorium and providing payment flexibility to people who lost their jobs and have not yet found a job.
In addition, small and medium-sized businesses are especially faced with severe cash flow problems due to business interruption, with most barely managing to stay afloat.
“Worse still, some can barely cover overhead. So how can they meet their obligations to banks? “said Akhbar, who is president of the Malaysian Association of Certified Fraud Examiners and a prominent anti-corruption activist.
He said that a vicious cycle would be established when the loan defaults, as the borrower would not be able to obtain more loans with depleted reserves.
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