THE targeted extension of the moratorium on bank loan repayments for those who have lost jobs or had their pay cut as a result of the Covid-19 pandemic was welcome news indeed earlier this week.
In his announcement on Wednesday, Prime Minister Tan Sri Muhyiddin Yassin touched on the banks’ commitment in the form of several measures to assist borrowers – regardless of whether they are individuals or small and medium enterprises – that are expected to benefit up to three million people and businesses.
The move is certainly reassuring and will help individuals and companies to get back on their feet again in the coming months.
The targeted moratorium will start once the earlier six-month automatic payment deferment, which was introduced in April, expires in September.
This measure is a win-win solution for banks and debtors: it helps banks eliminate possible bad debts and have a little longer to recover their loans, and it helps people by softening the impact of lost jobs and pay cuts.
Those who are without an income will appreciate the three-month deferment that will give them time to look for the next best thing to do.
For businesses, the extension will help to secure them financially, giving them some lead time to stand on firmer ground before they begin repaying their dues to the banks.
For the banks, offering the extension at least gives them a better chance to recover their loans, which run into millions of ringgit. It might take slightly longer but it’s still much better than getting nothing back at all if people become bankrupt or businesses go bust.
The government is obviously trying hard to get the economy going again and every Malaysian should work together with it to avoid a second wave of infections that would require a shutdown of economic activities again.
We cannot be lax in maintaining physical distancing and wearing face masks in public to protect ourselves and others from being infected with Covid-19.
This is the only way to stay ahead of the pandemic curve and drive the economy back.
Stay safe, Malaysia.
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