Business groups ask government to impose general moratorium on zero-interest loans due to pandemic

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PETLINJAYA: Several business groups have asked the government to impose a general moratorium on repayment of a zero-interest loan until the end of the year or when the country achieves collective immunity against Covid-19.

These groups want the moratorium to have an opt-out option, rather than asking banks for what they say the banks can afford.

In addition, these groups have proposed eight parameters that they say could make the moratorium effective and encompassing a wider area, including B40, M40 and all types of businesses – small, medium and larger enterprises.

“This, in turn, will enable all Malaysians in need and financially distressed to go through a pandemic from which we have yet to see the end,” the statement said Friday (June 11).

The statement was signed by 14 associations that are members of the Moratorium Untuk Rakyat working group, which is supported by another 125 groups.

All 14 said the government bailed out the financial system in the amount of RM70bil in 2008 and 2009.

“The main beneficiaries were the banking system, which was burdened with high credit debt and faced inevitable collapse.” We believe that the banking industry should take a moral stance and act when the country is in crisis, “they said.

They also said the banks can afford it, as the top eight local banks have collectively made a profit of RM93bil over the past three years.

The groups also said that, using the same denominators, the new moratorium is likely to cost banks RM 6.4 billion.

“This is 7% of the three-year annual profit of the eight largest banks, or 20% of last year’s profit.

“We have handed a letter to Prime Minister Tan Sri Muhiddin Yassin,” they said, acknowledging the intervention of the Pemerkasa Plus stimulus package and emphasizing the need to extend the moratorium.

All 14 also said the moratorium should be for everyone, including all businesses, as the pandemic spared no one, adding that they wanted all personal funds such as loans, overdrafts, credit cards and mortgages to be included. …

They also called for a zero-interest moratorium and a ban on banks from charging any expenses, while the loan restructuring procedure should be canceled.

Monetary Justice Movement in Malaysia Professor Datuk Dr. Ahamed Kamil Midine Mira said that business cash flow suffered significantly during the isolation.

He said they still have contractual obligations such as loans, rent and wages.

“Many businesses will have to close, and this could have a major impact on future tax collection and the country’s economy,” he said.

Likewise, Gerakan Ekonomi Malaysia President Armin Baniaz Pakhamin said that any moratorium would not make them rich, but would help them survive until the economy recovered.

“The government can use the emergency to make this happen,” he said, adding that many people were close to bankruptcy, including those in the T20 group.

The deputy president of the Malaysian Retailers Association, Raymond Teo, said they are asking banks not to write off loans, but simply a deferral.



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