PUTRAJAYA must compel banks not to impose any accrued interest or compound interest during the extended moratorium on loan repayments, said the Malaysian Trades Union Congress (MTUC).

The umbrella group of unions said this is not stated clearly when the government announced that the automatic moratorium, which ends in September, is extended on a targeted, by application only basis, by three months.

“Finance Minister Tengku Zafrul Tengku Abdul Aziz must state unequivocally that banks will not impose any accrued interest nor compound interest during the moratorium extension.

“Banks and the government have the moral responsibility and obligations to ensure that those (impacted by Covid-19) will not be made to pay any form of additional charges by banks,” MTUC secretary-general J. Solomon said in a statement.

Such provisions must also be spelt out clearly in application forms and any new revised loan agreement signed by the borrowers with the banks, MTUC added.

The congress reiterated calls to provide an automatic extension to all borrowers in the B40 and M40 groups, instead of forcing them to apply for the extension.

“This leaves banks the right to turn down any application… The reality is many B40 and M40 families who badly need the moratorium extension may not be conversant with applying online or may face problems getting the documents needed to satisfy the banks.”

Applications for the extension opened on August 7.

MTUC said even though unemployment figures improved marginally for June (773,200) compared with May (826,100), unions and employers estimate the true figures to be much higher after taking into account the self-employed whose businesses have folded because of the Covid-19 pandemic. – August 13, 2020.