‘Banks have enough capital buffer for loan moratorium extension’


BANKS have enough capital buffer to implement the loan moratorium extension as announced by the government, said Deputy Finance Minister I Datuk Abdul Rahim Bakri (pic).

To date, RM66bil out of the RM100bil allocation had been used by banks under the moratorium assistance through the economic stimulus package, he said.

“Each extension decision is regulated by Bank Negara and entails the involvement of the Association of Banks in Malaysia, ” he told Datuk Mohd Salim Sharif (BN-Jempol) during Question Time.

Mohd Salim had asked the Finance Ministry if banks were able to extend the loan repayment moratorium amid the challenging economic outlook.

Abdul Rahim said the loan moratorium extension on a targeted basis would help to prevent legal action against those who were unable to service their debts.

“We are looking into giving out targeted moratorium extensions.

“Borrowers facing difficulties in servicing their loans can visit the Credit Counselling and Debt Management Agency. As for small and medium enterprises (SMEs), they can visit the Small Debt Resolution Scheme agency to seek advice, ” he said.

On July 29, Prime Minister Tan Sri Muhyiddin Yassin announced a targeted extension for the moratorium on bank loans for those who lost their jobs or suffered pay cuts.

Muhyiddin said the banks had given their commitment to assist borrowers, regardless of whether they were individuals or SMEs.

Separately, Abdul Rahim said the government would review its current debt and liability exposure of RM1.264 trillion and revenue of RM244.5bil for Budget 2021.

He said the nation’s actual debts stood at RM823.8bil, which was within the statutory ceiling of 53.6% of the gross domestic product.

“It totalled RM1.264 trillion as it had included government liability exposure and commitments, ” he said when answering a question by Alice Lau Kiong Yieng (PH-Lanang).

Abdul Rahim said the calculation also took into account the cost of Covid-19 economic stimulus packages, apart from the RM166.9bil to implement infrastructure projects such as the LRT and MRT, and the Pan-Borneo Highway in East Malaysia.

He added that the government’s liability exposure included 1Malaysia Development Bhd debts of RM32.6bil and other financial liabilities of RM181.4bil linked to public-private initiative projects.

On government revenue for 2020, it was forecast at RM244.5bil based on crude oil prices of US$62 (RM260) per barrel although oil prices had slumped to US$41 (RM172) per barrel.

He said the Covid-19 pandemic and uncertainty in commodity prices had also impacted the government’s financial standing, which would be reviewed under Budget 2021, to be tabled on Nov 6.

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