Commentary Mustafa K. Anuar

FINANCE Minister Tengku Zafrul Tengku Abdul Aziz’s contention that the government does not have the power to compel banks to offer blanket loan moratorium to Malaysians during the current lockdown, predictably received backlash from various quarters.

Expressing disbelief, detractors such as certain politicians and concerned Malaysians, rightly argued that the emergency declaration that the government sought and gained early this year should give it enough legal and political muscle to persuade the banks to provide a loan moratorium, especially for those needing it.

Apart from the emergency powers, Umno Youth leader Asyraf Wajdi Dusuki argued there are existing laws that empower the government to impose moratorium, such as Section 72 of the Central Bank of Malaysia Act 2009 (Issues of Policy), which gives power to the government to overrule or cancel any decision made by Bank Negara Malaysia (BNM).

Additionally, Asyraf said that Section 6 (regulatory objectives) and 7 (powers and function of bank) of the Financial Services Act 2013 empowers the finance minister to instruct BNM on policies related to finance and banking.

We are indeed mindful that a six-month blanket moratorium was implemented in March 2020 soon after the first movement-control order was enforced. This moratorium was carried out by the government even without the legal force of an emergency rule at the time.

The call for such a blanket moratorium this time around resonates with the sentiments on the ground, particularly among the economically vulnerable who consider such loan deferment as a crucial band-aid. To be sure, other items in the recently announced Pemerkasa Plus stimulus package are equally useful.

While it is appreciated that the current targeted loan moratorium is aimed to help the B40 group as well as those who are recently made jobless and small businesses that cannot operate during the lockdown, it is argued that this list excludes other people who have, for instance, other financial commitments such as medical expenses, and pay cuts – and therefore are having difficulties in making payments on loans and hire purchases.

Bus operators, for example, also face hardships. They cannot operate their buses during lockdown and, hence, many of them reportedly have to depend on side incomes, such as tapping rubber, working at food stalls or driving taxis. With unstable wages, they cannot repay their loans or hire purchases.

The problem is that some of these bus operators got their loans or hire purchases from certain credit companies that are not registered with the Housing and Local Government Ministry and who do not participate in the Bus and Taxi Hire Purchase Rehabilitation Scheme. That is why the bus operators called on all credit companies to adopt a loan moratorium so as to help tide them over.

Muar MP Syed Saddiq Syed Abdul Rahman said despite last year’s moratorium, banks were still able to make handsome profits in the first quarter of the year. For example, The Edge Markets reported recently that CIMB Group Holdings Bhd recorded its highest-ever quarterly net profit in the first quarter ended March 31 this year, registering earnings of RM2.46 billion from RM507.93 million a year before.

In bad times, such as the one we’re all facing, it is hoped that the banks and credit companies would consider it their “national service” to help the less fortunate in our society by allowing them to defer their loan payments. A little help of this nature won’t kill the banks.

It is already bad enough for some people to have been made jobless, have their pay cut or struggle to make ends meet. To be haunted by loan repayments in the midst of all this, is the unkindest cut. – June 4, 2021.