KUALA LUMPUR – March 26, 2020: Malaysians have lauded Bank Negara’s instruction for banks to give borrowers a six months grace period from repaying their loans amidst the Covid-19 outbreak.
Airing their gratefulness on social media, they believed that the central bank had done the right thing as many have been rendered financially unstable due to the movement control order (MCO) that was enforced since last Wednesday.
“Very bold and courageous move by Bank Negara. This is a very noble thought and it will go a long way for many in building back their cash in hand after this MCO. Good job!” wrote Surein Padmanathan on Facebook.
“I am so happy with the automatic moratorium announced by Bank Negara. It is a good strategy to put money in the hands of the people which could save lives and the economy as well,” tweeted Izhar Mustaqin.
According to Bank Negara, the automatic measure will begin next month and that it is only applicable to loans that are denominated in ringgit that are not in arrears exceeding three months as on April 1. It, however, does not apply to credit card loans.
While no late payment penalties will be imposed, Bank Nagara did state that interests will continue to accrue on loan repayment that were deferred and that borrowers will still need to honour them in the future.
“Great move Bank Negara. Six months pause on current loans repayments. I hope landlords will also do the right hing,” Twitter user Fadhli hoped.
Another Twitter user, Jeevan Singh, also echoed Fadhli’s contention on how landlords should also give some leeway to tenants in light of the Bank Negara’s directive.
“Now that Bank Negara has given a six-month moratorium on loans and financing, all landlords should extend a similar grace period to their tenants if the rented property is financed by a bank loan,” he tweeted.
There were also those who believed that the moratorium was done in a bid to control inflation by way of increasing the people’s disposable income that have been negatively impacted by the partial lockdown.
“The government is trying to both alleviate the people’s financial burden and encourage them to spend more so that inflation can be controlled. The more the people save their money, the faster the economy will go into stagnation,” Adrian Miranda wrote.
In a statement last night, the Association of Banks in Malaysia (ABM) stated that its members fully support the Bank Negara’s pro-active measure, saying that it is the best way to assure the people of their financial standing amid the Covid-19 outbreak.
ABM chairman and Maybank group president and CEO, Datuk Abdul Farid Alias said such a measure was designed to not only support customers in the current crisis but also to ensure that banks can continue to play their role in sustaining the economy.
“We hope it will provide customers some breathing space and allow them to focus on other critical aspects of their livelihoods at this time,” read Abdul Farid’s statement.