PETALING JAYA: The Association of Banks in Malaysia (ABM) is fully supportive of Bank Negara’s proactive measures to mitigate the economic impact caused by the Covid-19 outbreak.
ABM said in a statement yesterday that its member banks are in full agreement with the intent of the moratorium announced by Bank Negara which is believed to be a necessary solution.
“The moratorium is the best measure to provide the greatest assurance of job preservation in the midst of personal financial adjustment.
“Banks acknowledge the vast majority of customers act responsibly on repayments, and apart from adverse circumstances, such as illness, marital status change, or loss of jobs, we have no reason to believe there will be a change in this behaviour.
“We are currently working out the full details of the proposals to ensure they will be efficiently executed with minimum inconvenience to customers, ” said ABM.
It added that any adverse asset quality issues will be relatively short-lived and temporary in nature.
As a summary, ABM members will grant effective April 1 an automatic extension of credit facilities in existence for a period of six months to retail and small and medium enterprises (SME) customers, excluding credit cards.
While interest will accrue during this moratorium period, there will be no payment of interest and principal required for credit facilities for the six-month period.
As for other segments, the moratorium will apply on a case-to-case basis and customers should be in touch with their bankers to discuss the specific relief sought.
ABM applauds the various initiatives taken thus far by the government and Bank Negara in dealing swiftly with the crisis.
ABM chairman and Maybank group president/CEO Datuk Abdul Farid Alias said: “The measures announced have been designed not only to support customers in this highly unusual global environment, but also to ensure that banks can continue to play their role in sustaining the country’s economy.
“We hope it will provide customers some breathing space and allow them to focus on other critical aspects of their livelihoods at this time.”
Apart from that, ABM clarified that it has presented a number of requests to Bank Negara, specifically in respect of the recognition and classification of assets, policies regarding MFRS9, liquidity and capital, as well as market behaviour concerning deposit-taking activities.