PETALING JAYA: Several business groups have asked the government for a blanket zero interest loan repayment moratorium until the end of the year or when the country has achieved herd immunity against Covid-19.
These groups want the moratorium to have an opt-out option instead of them having to request the banks, which they say banks could afford.
Additionally, these groups have proposed eight parameters which they say will be able to turn the moratorium into one that is effective and covers a wider footprint that includes the B40, M40 and all business types - the small, mid-tier and larger entities.
"This will in turn allow all Malaysians in need and in financial distress to navigate through a pandemic which we have yet to see the end of, ” they said in a statement on Friday (June 11).
The statement was signed by 14 associations that are members of the "Moratorium Untuk Rakyat” taskforce which is supported by another 125 groups.
All 14 said that the government had in 2008 and 2009 bailed out the financial system to a tune of RM70bil.
"The main beneficiaries were the banking system, which was saddled with high credit exposure and facing an imminent collapse. "We feel the banking industry must take a moral stand and step up when the country is in a crisis, ” they said.
They also said that the banks could afford it as the eight top local banks collectively made a profit of RM93bil in the last three years.
The groups also said that using the same denominators, the new moratorium would likely cost the banks RM6.4bil.
"This is 7% of the three-year annual profits of the top eight banks or 20% of last year’s profits.
"We have handed a letter to Prime Minister Tan Sri Muhyiddin Yassin," they said, while acknowledging the intervention of the Pemerkasa Plus stimulus package and highlighted the need for the moratorium to be widened.
All 14 also said that the moratorium should be for everyone, including all businesses as no one has been spared by the pandemic, adding that they wanted all personal facilities to be included such as loans, overdrafts, credit cards and mortgages.
They also called for a zero interest moratorium and that the banks must not charge any costs while there must be waivers for loan restructuring exercises.
Movement For Monetary Justice Malaysia Prof Datuk Dr Ahamed Kameel Mydin Meera said during a lockdown, the cash flow of businesses were significantly affected.
He said they still had contractual obligations such as loans, rent and wages to pay.
"A lot of businesses will have to close down and this can affect future tax collections and the economy of the country tremendously, ” he said.
Similarly, Gerakan Ekonomi Malaysia president Armin Baniaz Pahamin said any moratorium would not make them rich but would help them to survive until the economy recovers.
"The government can use the Emergency to make this happen, ” he said, adding that many people were close to bankruptcy, including those in the T20 bracket.
Malaysian Retailers Association deputy president Raymond Teo said they were not asking for banks to write off the loans but just a deferment.