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KUCHING, May 1: Bank Negara Malaysia (BNM)’s latest clarification on the hire purchase moratorium interest is not resolving the long term financial problems faced by the business sectors and people, but merely postponing their suffering to a later date.
Sarawak DAP chairman Chong Chieng Jen criticised the government’s decision, saying that the six-month moratorium on repayment should come together with a waiver of interest by the banks.
“It is merely postponing the suffering to a later date with an aggravated impact at the end of the moratorium period,” he opined.
Chong pointed out that all business sectors were affected by the Covid-19 outbreak and most will be recording losses for this year.
“With the banks continue to charge interest on their loans, it means that the banks continue to earn revenue on the accrued interest and will likely record profits in their books at the end of the year,” he said.
He believed that banks should waive all interests on certain categories of loans during the six-month moratorium period such as business loans, housing loans of RM500,000 or below, and all hire-purchase loans on motor vehicles and motorcycles.
“The moratorium only affects the liquidity of banks but not the profit and loss figures. When all businesses are making losses but only the banks continue to rig profits from their customers. This just defies the notion that ‘we are in it together’.
“Though the present Minister of Finance (Tengku Datuk Seri Zafrul Abdul Aziz) is formerly a banker, he should not adopt the ‘Banker for Bankers’ attitude, protecting the profits of banks at the expenses and sufferings of the people at large,” he said.
Chong, who is also Kota Sentosa assemblyman, added that after all, the banks can sustain with the six-month repayment moratorium which includes principal repayment.
“The 6-month interest waiver will only affect the profitability of the banking sector and the dividend payment to its shareholders for this year, but not the viability and sustainability of the banking sector.
“Therefore, the government should prioritise the interest of the 99.99 per cent (the people) versus the 0.01 per cent (shareholders of banks),” he continued.
Bank Negara, in a statement yesterday (April 30), said that hire purchase (HP) loans and fixed-rate Islamic financing will continue to accrue interest/profit charges after six-month moratorium that is effective from April 1 to Sept 30 this year, which was different from the initial directive on March 25 indicating “no additional interest on deferred HP loan payments”.
In a statement today, BNM expressed regrets for the “confusion and anxiety” but denied that it had backpedalled on its initial announcement.
It stressed that payment deferment is still automatic for HP and fixed-rate Islamic financing, adding that what is required now is an additional step to comply with procedural requirements under the Hire-Purchase Act 1967 (HP Act) and Syariah. — DayakDaily