KUALA LUMPUR: Loan repayments for 54 Malaysians missing in the Nepal floods could be put on hold, with banks agreeing in principle to a moratorium while a coordinated assistance framework is worked out, says a representative of the families’ support group.
Malaysia Solidarity: Families in Hope (MASFIH) spokesperson Dr Manivannan Rethinam said this was the understanding following a meeting with Bank Negara, banking associations, insurers and financial institutions yesterday.
He said the central bank had initiated a process for financial institutions to contact all affected families by Oct 16, with the proposed arrangements to be reviewed within two weeks.
“Most banks want to help. Some have indicated that they are willing to offer a moratorium without interest, penalties or additional commitments, although we have yet to receive written confirmation,” he told a press conference after the meeting.
Manivannan said the group had also presented a 35-page proposal outlining humanitarian financial relief, a liability standstill, asset protection and business continuity measures, which was received positively by the banks.
He said the meeting had helped financial institutions better understand the difficulties faced by families whose loved ones remained missing and whose legal status was unresolved.
“This is not a case of families being unable to pay or having no money. Their loved ones’ bank accounts have been frozen or suspended, and they cannot access them.
“We cannot even establish where their debts are or what assets they have because the account holders are still missing,” he added.
He stressed that any moratorium must go beyond suspending repayments, warning that interest could continue to accrue, penalties could be imposed and loan tenures extended.
“If a loan is supposed to run for five years, the family should not end up having to pay for seven years because of the moratorium.
“That is why we want a clear framework stating that there will be no interest accrual, penalties or extension of the loan tenure,” he said.
MASFIH has proposed an initial six-month moratorium, with the option of an extension if the missing persons’ legal status remains unresolved.
The group also wants banks and financial institutions to appoint senior-level contact persons to coordinate cases, provide written decisions and reduce repeated requests for information from distressed families.
Manivannan said Bank Negara and the Attorney General’s Chambers should also work towards a lawful mechanism allowing verified next of kin to access relevant financial information, including credit records.
While acknowledging that financial institutions were bound by confidentiality laws, he said the unprecedented circumstances called for a coordinated solution.
He said the families also hope financial institutions will consider providing assistance through their foundations and corporate social responsibility programmes to help families meet immediate living expenses.
Describing the meeting as a positive step, Manivannan said families could now focus on their daily lives without worrying about being pressed for repayments.
“We need timely answers and practical solutions because the families are still waiting for their loved ones,” he added.
In a statement, Bank Negara said the meeting ended with an agreement for all financial service providers to have dedicated contact persons that would reach out to the families.
It said it was ready to extend appropriate relief and support to the families, in accordance with applicable laws and regulatory requirements.
“These contact persons will assist the next of kin in navigating any administrative processes required,” it added while expressing its sympathies to the families of the victims affected by the Aug 26 tragedy in Nepal.
