KUALA LUMPUR (July 4): The Malaysian Trades Union Congress (MTUC) said today the government and Bank Negara Malaysia (BNM) must compel banks to extend the loan repayment moratorium by six more months or see record asset forfeitures involving borrowers.
In a statement today, MTUC secretary-general J Solomon said the MTUC strongly urges the Finance Ministry (MoF) and BNM to pull their weight in ensuring banks extend the moratorium by at least another six months, especially for the targeted group of workers who are still unable to service loans.
"This would include many of the 800,000 workers who lost their jobs until April this year and thousands more who were forced to take deep pay cuts or go on unpaid leave by their employers.
"The official statistics clearly show that many workers have been rendered unemployed due to the economic downturn caused by the Covid-19 pandemic. The opening up of the economy is an ongoing albeit slow process and it will take time for workers to get back on their feet and service their loans.
"There should not be any doubt on the part of the government, especially the MoF and BNM, that a large slice of the workforce are far from ready to resume servicing their car and housing loans. If the banks persist to ‘collect’, then we can expect to see record forfeitures of vehicles and homes of the working class which will inflict untold misery on them and their families,” Solomon said.
BNM had in March 2020 announced the six-month loan-repayment moratorium starting April 1, 2020 to help individuals and businesses affected by the Covid-19 pandemic, which had led the Malaysian government to implement the movement control order (MCO).
The restricted movement policy had initially required non-essential businesses to stop operations, while the public was ordered to stay at home to curb the Covid-19 outbreak.
Today, Solomon’s statement was in response to news reports, quoting BNM Assistant Governor Adnan Zaylani Mohamad Zahid, who was cited as saying that the economic recovery would continue and that “we (BNM) have no intention of extending the moratorium as it would have repercussions that we want to avoid”.
According to Solomon, there is no question of banks incurring losses because of the moratorium.
"The loans are not written off but the instalment payments merely need to be deferred until the economy normalises. There are no losses to speak of, merely a temporary deferment of monies that would be returned to the banks' coffers,” he said.
Malaysia's MCO was initially scheduled between March 18 and 31, 2020.
On March 25, Prime Minister Tan Sri Muhyiddin Yassin said the government decided to extend the MCO until April 14, because updates from the National Security Council and the Health Ministry indicated an increase in Covid-19 cases.
On April 10, Muhyiddin said the government was extending the MCO until April 28.
On April 23, Muhyiddin said the MCO would be extended for another two weeks until May 12.
On May 4, news reports, quoting Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob, indicated that regulations under the phase four of the MCO were null and void with the commencement of the conditional MCO (CMCO) or phase five of the MCO
On May 10, Muhyiddin said the CMCO would be extended to June 9.
On June 7, Muhyiddin said the CMCO will be replaced with the recovery movement control order beginning June 10 until Aug 31.