A GROUP of businesses have questioned Association of Banks in Malaysia chairman Abdul Farid Alias’ reasoning that there was no need for a blanket loan moratorium for individuals and small businesses.

In a statement, 14 organisations claiming represent over 400 business associations and chambers of commerce, in a rebuttal to Farid’s opinion piece titled “Targeted moratorium best solution for the country”, said nobody could decide what is a sufficient moratorium period.

“In hindsight also there can never be a ‘right time’ call. How did Datuk Farid arrive at six months being sufficient?” they said.

The organisations, which claim by proxy to represent one million businesses and 3.9 million self-employed and microbusiness owners and the people of Malaysia, said even in nations where vaccine roll-outs have reached an advanced stage, the arrival of new variants among other challenges have resulted in prolonged lockdowns, like in the UK.

“The vaccine is not a panacea and banks also have to acknowledge that uncertainties will continue impacting customers,” they added.

They also slammed Farid for saying that “there were many borrowers unaffected financially by the pandemic”.

“(That is) the most absurd thing to say. Abdul Farid must be in an entirely different utopia,” they said.

In defending why the people should not withdraw their EPF savings to help to tide them over during the pandemic, they pointed to Finance Minister Tengku Zafrul Tengku Abdul Aziz who said out of the 5.74 million EPF contributors in the country, 32% of them do not have more than RM5,000 in their Account 1.

“So he knows how bad the rakyat’s savings are.

“RM90 billion was withdrawn from Account 1, which is a total EPF deposit of RM1 trillion or 9%. So the number of people with less than RM5,000 in their savings has definitely increased!

“It is really disheartening that the banks do not see it.”

In their statement, they also disputed Farid’s contention that during the moratorium period, more than 70% of borrowers took the automatic moratorium, but after it ended, the percentage of customers that continued with Repayment Assistance (RA) and eventually Targeted Repayment Assistance (TRA) was around 15%.

They said in truth there was no option for borrowers to extend it.

“The banks are using an entirely different denominator to calculate this 15%. It is misleading and not true and they are only quoting the 1.6-1.8 million people whose applications they have approved until now, compared to the 8 million who benefited from the automatic programme.”

The organisations reiterated that there must be a blanket zero-interest opt-out moratorium made available until December 31 or when the country reaches herd immunity, whichever comes later. – June 15, 2021.