Cuepacs against shortening of loan repayment period

Cuepacs has protested against Bank Negara's directive to commercial banks to shorten the repayment period of personal and housing loans as it will put borrowers into difficulty.

Its president, Datuk Omar Osman said he hoped Bank Negara would review the circular before Cuepacs bring up the matter with Prime Minister Datuk Seri Najib Tun Razak.

As many civil servants applied for personal loans to pay for education and house repair after disasters, and to settle outstanding debts, he said Bank Negara should help ease their burden by lowering the interest rates.

"If only at the age of 45 civil servants can afford to buy a house and with 15 years of service left, they will retire in poverty," he told reporters after attending a meeting between Cuepacs and Angkasa on household debts involving cooperative members here today.

Bank Negara issued a circular to commercial banks on July 5 to shorten the repayment period of personal loan from 25 years to 10 years and housing loan to 35 years.

Meanwhile, National Cooperative Movement of Malaysia (Angkasa) president Datuk Abdul Fattah Abdullah urged Bank Negara to postpone the implementation of the circular, arguing that it would affect civil servant cooperatives, including Angkasa's revenue since its members were civil servants.

"If our revenue drops, our profit will plummet and civil servants will get less dividend which is their side income," he added.