By John Isaac
THE six-month loan moratorium is meaningless and cannot alleviate the hardship of Malaysians if it is not interest-free for all except for those in the Top 20 (T20) group, says DAP secretary-general Lim Guan Eng.
He reminded the newly-appointed National Recovery Plan coordinating minister Tengku Zafrul Aziz that the loan moratorium will only help in alleviating the financial problems of workers and businesses if it was interest-free.
Lim called for Perikatan Nasional (PN) to act boldly and instruct Bank Negara to direct the banks to waive interest during the loan moratorium except for those who are in the T20 (top 20 income earning) category.
“It is pointless for the government to grant a six-month bank loan moratorium if borrowers still have to pay even higher accrued interest after the moratorium. This higher overall cost of borrowing for those opting in for the moratorium was highlighted by Bank Negara.
“It warned borrowers that while banks will not charge any compounding interest or penalty interest while the payment is being deferred, interest will still be accrued on the deferred amounts,” the former finance minister said in a statement reported by Free Malaysia Today.
He said with banks enjoying healthy profits despite the Covid-19 pandemic, they should have some corporate social responsibility towards the eight million borrowers applying for the moratorium.
Lim said Malaysians are facing reduced or no income while many businesses are facing drastically reduced cash flow with closures being a real threat.
The Bagan MP said the situation is dire as the government itself has reported that more than 90% of the micro, small and medium enterprises risked closure, while the SME Association of Malaysia disclosed that 100,000 businesses closed last year with 50,000 more expected to suffer the same fate from the current total lockdown.
“And yet several banks have registered record profits for the first quarter of this year to continue their healthy after-tax profits of RM32.3 billion and more than RM23 billion for 2019 and 2020 respectively.
“Despite this, they do not have to waive hire-purchase interest unlike the first bank loan moratorium last year.”