KUALA LUMPUR: The Ministry of Finance (MoF) has denied claims made by Astro's in-house news channel, Awani, that the government plans to discontinue issuing housing loans to civil servants in a push to strengthen the country's fiscal position.

The ministry’s secretary-general Tan Sri Dr Mohd Irwan Siregar Abdullah said the statement made by the online television Astro Awani was not true.

"It is regrettable that the statement was aired without referring to the Ministry. In fact, the government was looking at improving the administration of the housing loan financing to civil servants," he said in a statement today.

Furthermore, Mohd Irwan said the government has already set up a statutory body, Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA), under the MoF.

The LPPSA will be tasked at managing matters related to the financing of such housing loans involving civil servants in the country, he said.

With the setting up of such a statutory body, the process for such loans would be carried out more efficiently, he pointed out.

He also assured all the terms and benefits that are made available to the civil servants with regards to the housing loans, will be maintained as it is.

In October last year, civil servants heaved a sigh of relief, after the minimum housing loan was raised from RM80,000 to RM120,000 in Budget 2015, which was announced by Prime Minister Datuk Seri Najib Razak.

Najib then also announced that the maximum housing loan for civil servants was raised from RM450,000 to RM600,000, while the RM100 for loan application processing had been waived.

Of late, mandatory salary deductions may be imposed for civil servants who failed to repay their National Higher Education Fund Corporation (PTPTN)'s loan.

Last month (June 2015), Chief Secretary to the Government Tan Sri Ali Hamsa said such action will be taken as a last resort to recoup the monies from the 33,000 civil servants.