PETALING JAYA: Bersatu has slammed the government’s proposal to allow EPF members to use their Account 2 savings as support for loan applications, describing it as “shallow”.
Bersatu information chief Razali Idris said the proposal showed that the government was incompetent as it could not anticipate the negative implications.
“If many people use their Account 2 savings as support for their loans and then default on repayment, the banks can only take action after the maturity of the EPF savings.
“This will lead to a very critical banking crisis,” he said in a statement today.
Razali also said those facing financial problems now are not in the position to take on additional debt, with many complaining that their Account 2 savings are already being used for repayment of housing loans.
He said the opposition is ready to sit down with the government to come up with a “logical solution”.
“We can also invite individuals and NGOs who have been demanding targeted withdrawals to discuss the matter together,” he said.
Yesterday, the finance ministry clarified that EPF savings can be used to support loan applications.
Prime Minister Anwar Ibrahim had proposed for retirement savings to be used as collateral for those seeking emergency loans, following repeated calls from the opposition and other groups to allow further withdrawals.
The ministry said the government is finalising the initiative to allow EPF members to use the savings in their Account 2 to support loan applications from banks.
It said the initiative will not burden the people because the interest rates (conventional) and profit rates (Islamic) imposed by the banks are expected to be around 4% to 5%, far lower than market rates for loans, which are around 8% to 15%.