Moratorium Untuk Rakyat puts pressure on auto-moratorium implementation

The task force consists of 14 businesses and civil society organisations say that local lenders could afford to do so

by NUR HANANI AZMAN / pic by TMR FILE 

THE task force for the Moratorium Untuk Rakyat calls on the government to implement a blanket zero interest opt-out moratorium made available until year-end or herd immunity is achieved.

The task force consists of 14 businesses and civil society organisations say that local lenders could afford to do so. It also urged Prime Minister Tan Sri Muhyiddin Yassin to not let the banks decide the fate of the rakyat.

“Nobody can decide how long was sufficient — in hindsight also there can never be a ‘right time’ call. Even in nations where vaccine rollouts have reached an advanced stage, the arrival of new variants among other challenges have resulted in prolonging lockdowns, most notably seen now happening in the UK.

“The vaccine is not a panacea and banks also have to acknowledge that uncertainties will continue impacting customers,” the Moratorium Untuk Rakyat task force said in a statement yesterday.

The group represents a combined of over 400 business associations/ chambers of commerce that by proxy represents the one million businesses, 3.9 million self-employed, micro-business owners and the people.

Association of Banks in Malaysia chairman Datuk Abdul Farid Alias recently said that the impact of the moratorium — implemented last year — was immediate and significant to the banking industry.

The task force however pointed out that publicly available data shows that eight top local banks collectively made a profit of RM93 billion in the last three years. (2018: RM35.22 billion, 2019: RM32.23 billion and 2020: RM25.23 billion).

“The banking sector is estimated to see losses of RM6.4 billion during the loan moratorium period, between April and September 2020, banks face losses of approximately RM1.06 billion per month based on Malaysian Financial Reporting Standards 9.

“These are not losses — these are only postponed towards a later date and banks are still able to recoup the capital and added interest during this extended contract. The losses the banks incurred are only on paper, a collection shortfall as debtors not paying their monthly bank obligation is not at all losses by any means,” the task force added.

Using the same denominators — this new moratorium will likely “cost” only RM6.4 billion which is only 7% of the three-year annual profits for the top eight of the local banks or 20% of their 2020 profits.

“The automated moratorium has a cascading effect, when the landlord gets their moratorium, it would be less pressured to collect their rents and the same for employees with lesser repayment to banks could lessen business owners’ burden to accede to a salary deduction. And businesses with fewer bank commitments could make payment to their staff (rakyat),” said the task force.

“The bank is still adamant on taking a ‘business as usual’ approach with stricter credit scoring — not a wartime footing approach,” they claimed.

Among the 14 associations that are members of the task force are Bumiputra Retailers Organisation Malaysia, Dewan Perniagaan Melayu Malaysia, Federation of Malaysian Business Associations, Malaysian Association of Theme Parks and Family Attractions, Malaysian Associated Indian Chambers of Commerce and Industry, and SME Association of Malaysia.

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