PUTRAJAYA and financial institutions should stop saying the current targeted moratorium is adequate in arguing why there is no need to reinstate the blanket moratorium which ended last month, said a bank employees’ union.

National Union of Bank Employees (NUBE) general-secretary J. Solomon called the notion “a complete fallacy” and said the argument cannot be further from the truth.

He said tens of thousands of lowly paid workers, despite having jobs, still cannot afford to resume repaying their loans, as their household income has dropped for various reasons.

“Sadly, these workers do not qualify for the targeted moratorium and are likely to default on their loan repayment unless the government has a change of heart and hears their plea for help,” Solomon said in a statement.

He said the government must reinstate a blanket loan moratorium for low-wage groups and SMEs to shield them from further privation.  

“The targeted moratorium with conditions attached is a farcical response to the suffering that is happening on the ground,” Solomon said, adding Putrajaya must commission a survey to gauge public sentiment, especially among low-wage earners, on the need for the moratorium.

“NUBE is confident there will be widespread support for the extension of the moratorium as the Covid-19 economic fallout has adversely impacted the lives of all Malaysians, more so lower income groups and SMEs.

“The predicament of our members who are in the low-wage cadre mirrors the grave situation across the labour market.”

Many workers do not qualify for the targeted moratorium and are left to their own devices to pay their loans, despite suffering a drop in their income, Solomon said.

“This is the reality gripping our country and the banks must respond by extending the blanket moratorium, at least until the end of the year,” he said.

Putrajaya implemented a six-month loan moratorium in April to help borrowers tide through the coronavirus pandemic.

Despite calls by many for the moratorium to be extended, the government said borrowers can liaise with their banks for loan adjustments.

Solomon said the public’s ability to repay their loans must not be based on simplistic calculations, as is the case of the conditions attached with the targeted moratorium introduced by banks starting this month.  

“Regrettably, the banks have imposed conditions that ignore the financial realities of most Malaysian households and SMEs. As a result, many families and SMEs are ‘unqualified’ to apply for the targeted moratorium,” he said.

“A blanket moratorium for a limited time will ensure no one is left out in the government’s effort to protect the livelihood of the people and sustain SMEs during this most difficult period.”

Solomon said the extension of the blanket moratorium for three months will not burden banks, as it will only mean deferred payments for loans of about RM6 billion.  

“This is a fraction of the RM32 billion after-tax profit banks are expected to reap for 2019,” he said.

“The RM6 bilion is not a loss incurred by the banks, but merely a delay in collecting the amount from customers once the economy is on better footing and a blanket moratorium is no longer needed,” he added.

Solomon said the re-imposition of the conditional movement control order (CMCO) in the economic centres of the country – Putrajaya, Selangor and Kuala Lumpur – has curtailed business activity and will further impede efforts to revive the economy.

The country recorded 629 new Covid-19 infections yesterday, with six deaths. The total number of infections to date stands at 18,758, with the figures expected to climb in the next few days.

He said the failure to extend the bank moratoriums will wreak havoc and create large clusters of families mired in poverty and unable to sustain themselves, as well as failed SMEs.

And, this will all be due to their inability to repay their loans as a result of the government and banks’ ignorance of their hardships, he added. – October 17, 2020.