PUTRAJAYA cannot force banks to grant loan moratoriums, said Finance Minister Tengku Zafrul Tengku Abdul Aziz.

Instead, it is a matter for Bank Negara Malaysia (BNM) to decide on with the banks, he told an online press conference today on the RM5 billion aid package announced by the government last night as the country goes into six weeks of a phased lockdown against the Covid-19 pandemic.

“The government does not control the banks, so this is a discussion between BNM and all the banks.

“We don’t have any legal ability to force the banks on what to do,” Zafrul said.

Under the Pemerkasa Plus package announced by Prime Minister Muhyiddin Yassin last night, a three-month loan moratorium will be given to B40 groups and those who have lost their jobs.

It is also for micro-enterprises and small-and medium-sized enterprises (SMEs) that are not allowed to operate during the nationwide lockdown.

Zafrul said this meant that people in the M40 or T20 category who have lost their jobs can also receive the loan moratorium.

Or they can get a 50% reduction in instalments for six months.

“Similarly, for affected micro-enterprises and small- and medium-sized enterprises (SMEs), those who have loans below RM150,000 are also included.

“This is the position of the banks, and BNM coordinated this effort. If you can name one country that has done this, please do so,” he said.

Tengku Zafrul added that his ministry will help anyone eligible for the moratorium but had difficulty obtaining it.

The loan moratorium this time is only for three months, compared to six months last year when the government implemented the first movement-control order in March 2020.

Since then, the government has rejected repeated calls for the moratorium to be extended, saying that banks and borrowers can enter into their own agreements on loan repayments.

On the government’s fiscal position, Tengku Zafrul said the ministry is still calculating the impact of increased spending.

The fiscal deficit was recently revised to 6% from 5.4% of gross domestic product (GDP) for 2021.

The federal government’s statutory debt is also estimated to increase from 58% in 2020 to 58.5% by this year-end.

Despite that, Zafrul said the government has “enough to finance aid by increasing our borrowings.” – June 1, 2021.