PUTRAJAYA should have ordered an automatic extension of the moratorium on loan repayments for low-income workers and businesses struggling to survive the Covid-19 pandemic, said the Malaysian Trades Union Congress.

Secretary-general J. Solomon, in a statement, said the lives of B40 and M40 folk will be severely impacted when the six-month moratorium ends in September.

“Ending it in September will bring untold misery and hardship to the rakyat.

“Extending it by another six months will provide temporary financial relief, which they desperately need to lessen their despair.

“The finance minister and Bank Negara Malaysia should have taken the initiative to compel banks to at least continue the moratorium automatically for B40 and M40 workers.

“The same should also be extended to businesses that are struggling despite the lifting of the movement-control order.”

The statement is in response to Finance Minister Tengku Zafrul Tengku Abdul Aziz, who said the moratorium will not be extended despite calls for an extension.

Yesterday, Zafrul told the Dewan Rakyat that the government has not yet decided on extending the moratorium, but banks can consider it on a targeted basis.

He said most businesses have reopened and are generating an income, and the majority of employees have returned to work.

Borrowers should seek advice from banks on loan extensions or fee waivers, he added.

Solomon said the government is putting the onus on banks to decide on repayments.

“Saying that the people should talk to banks and the government will do likewise only shows a lack of decisive leadership on Zafrul’s part to help people and businesses in this most trying of times.

“Knowing our bankers, we will see banks seeking payments from the 800,000 people officially unemployed till May and many businesses still struggling to survive, including small and medium enterprises and retailers.

“The minister is talking about restructuring or lowering interest, but the point is, they will still need to pay.”

He said Zafrul’s remark that businesses and workers can resume servicing their loans as most coronavirus restrictions have been lifted is “too simplistic”.

“Such a statement, implicit or otherwise, really reflects a deep disconnect between the minister and the reality on the ground.”

Workers’ inability to service their loans is not because of poor financial planning, but rather, the virus crisis has led to job losses, pay cuts and unpaid leave, he said, adding that the cost of living has increased considerably, too.

“We call on Zafrul and the government to show the initiative, zeal and commitment needed to get banks to grant a six-month extension for the moratorium on housing, vehicle and personal loans.” – July 22, 2020.