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Challenging times after moratorium ends end September?

First of all, I disagree that moratorium extension after 30th September should be for all just like the first round moratorium which was automatic for all and for 6 months unless one opts out of it. Any politician asking for it is NOT savvy to the fact the banks are not charitable organisations and has shareholders who are also Malaysians as well. Yes, I am both a borrower and shareholder of one particular bank in Malaysia. A super small stake but hey, still a shareholder okay.

Secondly, it has already been announced earlier that moratorium extension would be on a case by cases basis and this latest announcement is basically a formal confirmation that this is now targeted versus a blanket one. This was what Prime Minister Tan Sri Muhyiddin Yassin announced.

Article in nst.com.my Muhyiddin announced a three-month extension of loan repayment moratorium for those who lost their jobs this year due to the pandemic and had yet to secure employment. Bank Negara Malaysia (BNM) said a more targeted approach for moratorium extension to assist those affected by Covid-19 would ensure that financial resources and attention were prioritised.

BNM said, “Banks will offer flexibility for at least six months. Banks will also consider extending the flexibility at the end of that period, bearing in mind the salary of the borrower at that time.” BNM also said that banks were committed to providing repayment flexibility to other individuals and all SME borrowers affected by Covid-19. To obtain the flexibilities, borrowers need to apply directly to their banks from Aug 7. Please do refer to the full article here. Article in nst.com.my

Briefly, if someone needs it because they really need it, please proceed to apply directly to the banks starting from 7th August. By the way, everyone should also note that the banks themselves have no benefit in forcing the borrower into default status because even if they were to take back the property and to auction off the properties, it does not necessarily mean that the property price will be higher than the loan they provided.

In other words, they (the banks) may lose money if they refuse to help the concerned borrowers who just needed some time to get back on their feet and restart paying their loans later on. Besides this will also increase their non-performing loan number and it does not look good for them as well yeah. As for the many who has started working and have back their salaries but some of these have been invested into the stock market, then it’s time to get ready to start paying come October.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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