PUTRAJAYA should use its emergency powers to compel banks to automatically extend the loan moratorium to all Malaysians, including the M40 or middle-income earners, said DAP secretary-general Lim Guan Eng.

Other than those in the T20 group, the moratorium should not have to be a targeted programme only for the B40 and those who have lost their jobs or experienced reduced income due to the Covid-19 pandemic.

“The M40 have also suffered a loss of income and business revenue during the lockdown. Denying the M40 the same offer is not sympathetic to their current financial plight, which may cause them to slip down to the B40 group.

“Those in the M40 group should be offered the bank loan moratorium as they are taxpayers who contribute to the nation’s coffers,” Lim, who is also former finance minister, said in a statement.

The government’s Permerkasa Plus for the current total lockdown offers B40 borrowers, those affected by loss of income, micro-enterprises and small- and medium-sized enterprises (SMEs) not operating during the movement restrictions a loan moratorium. The scheme will benefit five million borrowers.

Unlike last year’s loan moratorium, which was for six months, this one is only for three months.

Lim said it should be extended automatically until the end of the year for those in the B40 and M40 groups as banks, which have been making profits, will not be burdened.

“Such a bank loan moratorium until the end of the year when the National Immunisation Programme is completed can benefit eight million Malaysian individuals and companies and can be easily absorbed by the banking industry’s healthy after-tax profits of RM32.3 billion in 2019 and RM23 billion in 2020.”

He accused prime minister Muhyiddin Yassin of being selective when using emergency powers, such as to withdraw RM5 billion from the National Trust Fund (KWAN), but not to compel banks to extend the moratorium.

Lim said DAP also disagreed with Finance Minister Tengku Zafrul Tengku Abdul Aziz, who said the government had no power to force the banking sector to grant loan moratoriums.

This, Lim said, is easily remediable with the use of the emergency powers and by amending the law.

“This dispute can be easily resolved by the exercise of emergency powers to amend various laws during the Covid-19 crisis period.

“Lawyers have suggested amending the Financial Services Act 2013 similar to KWAN Act or bringing back the Covid-19 Temporary Measures Act to cover the banking industry that prohibit penalties for failures to perform contractual obligations.”

Lim also asked that the government reveal the actual cost borne by the banks due to the implementation of the moratorium as, unlike in the first movement-control order, hire-purchase loan interests are accrued and not waived by the banks.

“Such accrual of hire-purchase loan interest will cut down the cost for banks and the government should reveal the cost borne by banks compared with their tens of billions of after-tax profits.”

The Permerkasa Plus stimulus package is worth RM40 billion, of which RM5 billion is a direct funds injection.

Besides the three-month loan moratorium, there is also cash aid totalling RM2.1 billion for Bantuan Prihatin Rakyat payments of between RM100 to RM500, depending on the household size, and for singles earning below RM2,500 monthly. – June 3, 2021.