Najib: Extend moratorium for the sake of borrowers

FORMER prime minister Datuk Seri Najib Razak has urged Bank Negara and other banks in the country to reconsider the decision not to extend the moratorium on loans beyond September.

Expressing his concern that many borrowers and companies might go bankrupt trying to pay their monthly instalments after September, Najib said the main reason banks wanted these payments to continue was so that they had funds to provide fresh loans.

“But if demand for new loans has dipped, then there is no need for banks to force their customers to repay the principal payment, ” he said during his speech on the motion of thanks for the Royal Address.Due to expire in September after a six-month period, the government announced the moratorium in March as part of a plan to address the economic fallout due to Covid-19.Najib said if banks were not able to extend the moratorium, they should consider allowing borrowers to only repay the interest in their monthly instalments.

The government must be more stern and not bow down to demands from banks, he said, adding that it and government trust funds were among the biggest shareholders in these institutions.

“This is the time for banks to sacrifice so that their customers are not affected and are able to return billions in profits to banks in the future when the Covid-19 crisis ends, ” he said.