'Loan moratorium extension won't make banks go bust'

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Category: CONSUMER DIGEST

People queuing up outside a bank to withdraw their Prihatin aid in April. Despite the pandemic, banking institutions still made profits throughout the second quarter of the year. -NSTP/ASWADI ALIASSeptember 3, 2020 @ 10:40am
KUALA LUMPUR: Extending the six-month moratorium on bank loans until December will not affect the liquidity of financial institutions, say non-governmental organisations (NGO) and unions.

The groups were of the opinion banking institutions would not face bankruptcy if the moratorium was extended.

Congress of Unions of Employees in the Public and Civil Services (Cuepacs) president Adnan Mat said the extension for another three months was not a problem as banks had made profits throughout the second quarter of the year.

"The profits showed they are still able to survive despite the moratorium and the economic slowdown due to Covid-19.

"Financially, the people are affected (and) the extension will certainly provide some relief.

"Cuepacs does not see it as a detriment to the banks, as it will only slightly reduce their profits.

"The people and the country are in trouble.

"This is the time for banks to take care of us so that in future, these banks can continue to run their businesses," he said.

He also hoped the moratorium would be extended to all, including the B40 group.

"For borrowers who do not have any financial problem, they are encouraged to continue repayments as usual," said Adnan.

Malaysian Trades Union Congress secretary-general J. Solomon said banks could afford to extend the moratorium to the B40 and M40 groups, and it should include those listed in the government database.

"It is inadequate and superficial to only approve the moratorium for those who lost their jobs or suffered pay cuts due to the Covid-19 economic fallout.

"All workers, including the self-employed, are suffering as factories, retail shops and other businesses struggle to stay afloat. Many have shuttered altogether.

"The cost of living has not been brought down, and many low- and middle-income families are impacted, some worse than others. As such, a blanket moratorium should be given to all B40 and M40 groups to help them.

"It will give them the respite and cushion they badly need while the economy recovers," he said.

He also said banks should not demand that borrowers meet certain conditions to qualify for the three months' moratorium as it would be unkind, unethical and devoid of compassion and empathy that low-wage earners needed during this trying time.
Source: https://www.nst.com.my/news/nation/2020/09/621536/loan-moratorium-extension-wont-make-banks-go-bust