Defer loan payments temporarily, employers urge banks

Malaysian Employers Federation executive director Shamsuddin Bardan says Bank Negara should discuss the possibility of deferring loan payments with the finance ministry. (Bernama pic)

PETALING JAYA: The Malaysian Employers Federation has urged the finance ministry to ask all banks in Malaysia to defer loan payments for employers and staff facing the Covid-19 crisis.

MEF executive director Shamsuddin Bardan said these were hard times and the banking industry needs to consider the plight of the business community.

“The banks will not suffer losses as the payment period will just become longer.

“The finance ministry needs to push all banks in Malaysia on this matter,” he told FMT.

He was responding to Entrepreneur Development and Cooperatives Minister Wan Junaidi Tuanku Jaafar’s statement that clients of Bank Rakyat, SME Bank and the National Entrepreneur Group Economic Fund, who had been affected by the Covid-19 pandemic, could apply to defer repayments of their loans for six months, effective March 16.

Shamsuddin also urged Bank Negara to look into this proposal and discuss the possibility of deferring the payments with the finance ministry.

Adding that this could be included as part of the RM20 billion economic stimulus package implemented by the government on Feb 27, he said the additional money will come in handy for the public.

He said a lot of companies are facing hard times and during such times, the government needs to consider all possible ways to reduce hardship.

He said the additional money could help staff who had been asked to take unpaid leave or suffered pay cuts due to the shorter working hours.

However, Shamsuddin said the government should not allow employees to withdraw from Employees Provident Fund (EPF) savings.

He said that is part of old-age savings of employees and they should be encouraged to save that money.

In a statement earlier today, the central bank said those facing trouble repaying their loans should contact their banks immediately to arrange for “alternative repayment measures”.

Prime Minister Muhyiddin Yassin had said the gross domestic product (GDP) of the country is expected to drop by 0.8% to 1.2%, a drop of RM10 billion to RM17 billion for 2020.

Economist have also warned that the country’s economy was slowing down due to the Covid-19 pandemic.