THE Malaysian Trades Union Congress (MTUC) wants Putrajaya to compel banks to extend by another six months the moratorium on payment of monthly instalments for housing loans and vehicles.

MTUC secretary-general J. Solomon said the Finance Ministry and Bank Negara Malaysia must ensure banks extend the moratorium, especially for a target group of workers who are still unable to service the loans.

“Clearly, the MOF and BNM must not abdicate their responsibility to ensure that the moratorium is extended to another six months to all B40, M40 groups, as well as all workers who have lost their jobs irrespective of their salary scale,” he said today in a statement.

Solomon was responding to BNM’s statement that that financial institutions are unlikely to extend the six-month moratorium on payment of monthly instalments for vehicles and housing loans which ends in September.

The moratorium came under the government’s Prihatin economic aid package, which proposed that all loan repayments by individuals and small and medium enterprises be deferred for six months from April to September.

BNM assistant governor Adnan Zaylani Mohamad Zahid is reported to have said that “we have no intention of extending the moratorium as it would have repercussions that we want to avoid.”

Finance Minister Zafrul Abdul Aziz, meanwhile, said on June 28 that it was up to the banks to extend the loan moratorium in a targeted manner.

Solomon today said the extension should also be given to companies  struggling to stay afloat amid the pandemic.

He said the extension should be offered to the 800,000 workers who lost their jobs in April and the thousands more whose salaries were drastically reduced or who were forced to go on unpaid leave.

He said it was “downright cruel and inhumane” for banks to adopt a “business as usual” attitude and expect people who have lost their jobs and have little or no income to resume paying their loans.

He said official statistics clearly show that many have been rendered jobless in 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 Finance Ministry and BNM that a large slice of the workforce is far from ready to resume servicing their car and housing loans.

“If the banks persist (in collecting), 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.”

He said in 2019, banks in Malaysia recorded multi-billion ringgit in profits, as had been the case for many years. 

“In facing Covid-19, both the Finance Minister and the BNM have repeatedly said the banking sector remained strong with more than adequate financial liquidity. 

“This points to a strong and vibrant banking sector that is easily able to grant a further six month extension to needy Malaysians who are in dire need for it. 

“The banks have a moral obligation to do this and both the Finance Ministry and BNM must stop making excuses for them not to do so.”

Solomon said the government and BNM have more than enough authority to direct the banks to grant the extension and as such, they must stop evading the issue.

 If necessary, the Prime Minister’s Office must intervene for the sake of the rakyat, he said.

He added that by compelling the people to resume paying their loan instalments from October, the banks and the government will only be destroying the goodwill and credibility they have earned thus far 

“Extending the moratorium by a further six month will not harm the bottomline of the banks, but will instead go a long way to help the poor and downtrodden workers.” – July 4, 2020.