Do you like the moratorium of 6 months? I think majority of Malaysians do. The moratorium of 6 months specifically for home loans until end September 2020 brought financial relief to many. It gave a breathing space to those who may have lost their job and is now struggling to find a new one. No salary meant no way to pay home loans. Reserves built up may be depleted very fast once we factor in the repayment for home loans or even rental especially if one is without a job.
The fact is, even as at today, not all businesses are restarting and not all have regained the business volume before the arrival of COVID-19. My friend said things will never be the same. I disagree but yeah, I have to agree that normalisation will take a long time more and will not be happening anytime soon. In fact, the GDP is likely to contract. These are the two latest predictions. Read them yeah. From IMF and World Bank. (click to read)
Article in malaymail.com Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz says that whether banks extend the moratorium or not depends on the banks directly. The moratorium could be a targeted one but banks will not be forced to do so. He said, “But in my personal view, we ought to help the people who need help.”
He also said that the targeted moratorium extension should be looked at by banks on a case-by-case basis. He said, “Going forward, I think the best (way) is we focus on the targeted groups who need help.” He also said that borrowers have to engage with their banks early if they feel they need to reschedule their loan repayments. Please do read more in the article yeah. Article in malaymail.com
Two banks have since responded. Ambank Group chief executive Sulaiman Mohd Tahir said, “We should be looking at certain segments, and groups of people who require it. I am sure banks (are) in the position to also help out, in terms of people who are affected very much as the result (of the pandemic).” He also said that there should not be a blanket kind of moratorium because during the MCO period, situation was quite critical then. Read article in freemalaysiatoday here.
Article in theedgemarkets.com Maybank group president and chief executive officer Datuk Abdul Farid said this about the extension of moratorium. “The moratorium is basically to give us more time because the impact of COVID-19 is something that we never experienced before, so none of us knew how long and deep the impact would be. So we need to digest, need time to talk to customers to come out with a plan in order to help them repackage their (credit) facilities when they come out from moratorium in a strong position.” Article in theedgemarkets.com
I think everyone needs to also understand that banks are not charitable organisations. They also needed to take care of their shareholders too. Focusing their resources on the ones who needed these the most seem to be a fair statement. Let’s understand that even banks do not wish to have a high number of loan defaulters. It will always be a balance of how much they could assist before proceeding to take actions to recover the debts. We will wait for a few more banks to also announce their intentions. I think these two have set the direction. Happy understanding and if you do need the moratorium extension, the advice is to start speaking to the banks now and not at the end of September.
Next suggested article: When banks refuse to lend you what you wanted, what does that mean?