Dismay on the decision to impose loans’ additional interest charge

 

KUALA LUMPUR — Bank Negara Malaysia (BNM) and the Association of Banks Malaysia (ABM) have been asked to re-consider their latest stance on imposing interest for the six-month moratorium on loans.

According to a press statement by Pakatan Harapan secretarial council, it requested that banks do not impose any form of interest for as long as the moratorium is in effect.

“At a time when the national economy is affected by the extended movement control order, with more and more reports incoming every day on hotels and businesses shutting down, as well as workers with slashed salaries or losing jobs, the banking sector should be more concerned with the public’s wellbeing,” the council said in a statement.

Imposing additional interest on loans under the moratorium gives the impression that the sector does not care about the rakyat’s fate.

“The banking sector should make sacrifices for the sake of the nation and rakyat. This half-way resolution such as imposing interest during the moratorium will only strengthen the perception that the sector is uncaring.

“We are confident that although banking’s revenues will be affected in the short-term should the sector choose to not impose interest, it will ultimately not cause a loss in the long-term,” said the council.

Yesterday evening, BNM announced that hire-purchase loans and fixed-rate Islamic financing would face additional interest charges once the moratorium, which runs from April 1 to September 30, expires.

Borrowers were given the options of either paying off the collective six months’ worth of loans without any additional interest charged, or pay slightly more once the regular monthly installment resumes in October 2020.

Meanwhile, former de facto law minister Azalina Othman Said has trained her gun at Finance Minister Tengku Zafrul Tengku Abdul Aziz over the latest change in procedure.

In her tweet, Azalina said, “This is what happens when the finance minister is not a people’s representative but a bank representative.”

Also Batu Kawan MP, Kasturi Patto on her Facebook posting told the Finance Minister to “Keep to your word Mr Minister.”

She urged the Finance Minister to “Stop protecting banks and start protecting people”