Blanket loan moratorium not good for economy, people - BNM Governor

Its governor, Datuk Nor Shamsiah Mohd Yunus, said this is because the implementation of a blanket loan moratorium will affect millions of people in the long run, including economic recovery efforts.

In fact, she stressed, the notion that the economy can only be helped by a blanket loan moratorium was wrong.

"First, it will affect the bank's buffer and make it difficult for businesses and individuals to get new loans because banks are at risk.

“Second, the profit and strengthening of banks is very important for the millions of Malaysians who hold not only deposits but also indirect stakes in the form of savings in EPF (Employees Provident Fund), ASB (Amanah Saham Bumiputera), KWAP (Fund Retirement (Incorporated), LTAT (Lembaga Tabung Angkatan Tentera), and Tabung Haji.

"Third, the targeted moratorium is better than the comprehensive moratorium because it gives borrowers the option to make their own financial decisions," she said in a virtual press conference on the Economic Presentation 2020.

Shamsiah said so far, a total of 1.4 million borrowers have applied for repayment assistance with 95 per cent approved.

In fact, she explained, 45 per cent of them chose to restructure their monthly payments rather than wanting a moratorium.

"Many of them are from the segments of borrowers and low-income households and B40.

"This shows that borrowers make the right decision in managing their debts according to their affordability.