Over 49,000 civil servants may risk bankruptcy - Cuepacs

He said the group of civil servants were found to have applied for personal loans from financial institutions with the repayment amounts beyond their means.

"This situation is getting more serious as there have been civil servants who had forged their salary slips when applying for loans," Azih told reporters after attending the Labour Day Seminar here today.

He said the absence of a system that could monitor the loan applications by the civil servants was also among the reasons they had requested for amount beyond their means and made overlapping loans.

"Now, the government has given the opportunity for over 20 credit agencies to deduct the salaries of civil servants who had applied for loans without having to refer to one another (financial institutions).

"They (civil servants) can borrow from any financial institution by only bringing in their salary slips and their salaries will be deducted every month. There are civil servants who have initially applied for loan with Institution A, make subsequent applications with Institution B and C," said Azih.

As such, he said Cuepacs was now proposing that the government adopt the system being implemented by the Malaysian National Cooperative Movement (Angkasa), namely the Credit Reporting System (Spekar), which has the records of civil servants.

"This (proposed) system will be able to control the loans by the civil servants as it can detect data on salary deduction and credit information of the civil servants.

"There are over 3,000 people (civil servants) who have been declared bankrupt at present. The numbers will increase if this (problem) is not curbed," Azih added.