Finance Minister: No Final Decision On Extension Of Loan Moratorium Yet

finance minister tengku zafrul abdul aziz
(Image: Malay Mail)
finance minister tengku zafrul abdul aziz
(Image: Malay Mail)

Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said that the government has yet to decide on whether the loan moratorium will be extended.

“Regarding the moratorium, we are still in discussions and have not reached a final decision,” he said in a Q&A session during a Parliament sitting earlier today. He added that the government is in the midst of discussing with the banks on using a targeted approach in helping borrowers with their loans.

Tengku Zafrul commented that targeted financial assistance will be a more suitable approach as most businesses have started reopening since May, which means that most borrowers are now able to generate income and finance their loans.

maybank bank counters
(Image: The Star)

“As such, the next steps are to have continued discussions with local banks to provide more targeted aid. For example, this may mean extending the loan period to reduce the instalment amount, or to change terms and conditions,” said Tengku Zafrul. In the meantime, borrowers who foresee difficulties in repaying their loans post-MCO should meet their respective banks to discuss or seek assistance from the Credit Counselling and Debt Management Agency (AKPK) as soon as possible.

Separately, several industry sources have said that banks will not extend the automatic loan moratorium, but are open to assisting borrowers by restructuring and rescheduling loans in a targeted manner. According to these sources, one reason why banks are not in favour of a blanket extension is because they prefer for customers to reach out to the financial institutions to communicate and renegotiate their loans.

“It is estimated that there will be three million borrowers who will take that offer up,” said one of the sources. Another source noted that the banks will have until the middle of next year to restructure and reschedule their customers’ loans.

bank negara malaysia
(Image: Malay Mail)

The ongoing six-month automatic moratorium was first announced by Bank Negara Malaysia (BNM) in March as a measure to provide some relief for Malaysians who were struggling financially during the movement control order (MCO) period. It is slated to end on 30 September, although various parties – including former Finance Minister Lim Guan Eng, the Malaysian Trades Union Congress (MTUC), and the Federation of Malaysian Consumers Associations (FOMCA) – have urged for an extension.

Meanwhile, some banks – such as CIMB and AmBank – have already said that they are not likely to offer a blanket extension to all customers. Instead, they will consider taking a targeted approach by offering extensions to those truly in need.

(Sources: The Star [1, 2])

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