Automatic loan moratorium to be discussed – PM

The Malaysian government will discuss the request for an automatic moratorium on bank loan repayments to ease the financial burden on the people in light of the ongoing pandemic, prime minister Datuk Seri Ismail Sabri Yaakob said.

“The government is aware of the situation faced by the rakyat and will try to assist as best as possible,” the prime minister said in response to a question posed by Pontian MP Datuk Seri Ahmad Maslan, reported The Star.

One suggestion raised in today’s Dewan Rakyat session by Port Dickson MP Datuk Seri Anwar Ibrahim was for the government to inject an additional RM45 billion into the Covid-19 relief effort, and said that any implementation of a loan repayment moratorium “must be one that is meaningful.”

The Covid-19 relief funds provided through the RM45 billion injection must be carefully monitored to avoid the cash aid being used by its recipients to pay off their bank loans, Anwar added.

In response to Anwar’s query on what the government is doing to address the country’s decrease in household income by 10.3%, PM Ismail Sabri said that eight economic stimulus packages have been implemented since last year, when the Covid-19 pandemic saw unemployment increase to 5.3% last May.

The prime minister also acknowledged that incidences of poverty have increased to 8.4%, or 636,000 individuals and households last year, compared to 5.6% or 405,004 in 2019 due to the pandemic, the report said.

Of the eight stimulus packages introduced previously, among them was a moratorium on loan repayments to benefit seven million individuals, said Ismail Sabri, and added that the government had also spent RM3.14 billion for discounts on electricity bills for 8.8 million households, as well as RM106.8 million on 1,121,385 food baskets for distribution to the less fortunate.

Earlier in June this year, then-prime minister Tan Sri Muhyiddin Yassin announced a six-month loan repayment moratorium for all Malaysians across all income segments from B40 to T20, including micro entrepreneurs.

This was offered with automatic loan approval for individual borrowers, though approval of applications by companies such as small and medium enterprises (SMEs) are subject to review by banks, and not automatic. On June 29, finance minister Tengku Datuk Seri Zafrul Abdul Aziz said that the moratorium is not interest-free, but banks have been told to waive compounded interest and late payment penalty charges.

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