Blanket loan moratorium not the best idea, says Bank Negara governor

Updated 3 years ago · Published on 11 Feb 2021 5:03PM · 5 Comments

Bank Negara says 1.4 million Malaysians have applied for repayment assistance, with the approval rate at 95%, adding that about 45% of borrowers are opting for a reduction in monthly instalments. – The Malaysian Insight file pic, February 11, 2021.

AN automatic moratorium on loans will not be in the best interest of the economy and the people, said Bank Negara Malaysia governor Nor Shamsiah Mohd Yunus.

“Firstly, it will erode banks’ buffers and make it difficult for individuals and businesses to obtain new loans.

“Secondly, banks’ soundness and profitability matters for millions of Malaysians, who are not only depositors in the banks but actually shareholders, directly (in terms of) their savings, and holdings in institutions like Employees Provident Fund, Amanah Saham Bumiputera, Retirement Fund (Incorporated), Lembaga Tabung Angkatan Tentera and Tabung Haji.

“Thirdly, the targeted approach is better than an automatic blanket moratorium as it puts the choice in the hands of borrowers, (allowing them) to make their own financial decisions,” she told reporters during the virtually-held media conference to announce the fourth quarter of 2020’s gross domestic product (GDP) today.  

Nor Shamsiah said 1.4 million Malaysians have applied for repayment assistance, with the approval rate at 95%, adding that about 45% of the borrowers are opting for a reduction in monthly instalments.

“Borrowers are making informed choices on managing their debts based on what they can afford. So, they are not asking for moratorium, they don’t want a one-size-fits-all solution,” she added. – Bernama, February 11, 2021.

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Comments

  • The rakyat not asking for a 12 months moratorium. 4 months of moratorium is sufficient... The banks still enjoyed an 8 months of payments. These 4 months of auto moratorium would be injected back to the economy. To say that the banks are at risks... Some registered high profits last year... With basically 6 months of loans payments... For sure they be able to withstand a 4 months moratorium...just to share some thoughts

    Posted 3 years ago by DOLBLNE RICHARD AROK · Reply

  • The rakyat not asking for a 12 months moratorium. 4 months of moratorium is sufficient... The banks still enjoyed an 8 months of payments. These 4 months of auto moratorium would be injected back to the economy. To say that the banks are at risks... Some registered high profits last year... With basically 6 months of loans payments... For sure they be able to withstand a 4 months moratorium...just to share some thoughts

    Posted 3 years ago by DOLBLNE RICHARD AROK · Reply

    • agree.

      Posted 3 years ago by Noor Azhar Kamaruddin · Reply

  • We need the blanket moratorium for at least 3 months or so. This will give people with more cash to spend and get the economy going. Money needs to be transacted within the population to jump start the economy again.

    Posted 3 years ago by Noor Azhar Kamaruddin · Reply

    • You got my vote.... Thanks

      Posted 3 years ago by DOLBLNE RICHARD AROK · Reply