Bank Simpanan Malaysia (BSN) is rejecting all loan applications from oil and gas industry employees, amid speculation of widespread retrenchment following the slipping oil price.

This "temporary measure" is part of BSN’s risk management procedure to protect BSN savings accounts holders and stakeholders, Bernama quoted the bank as saying in a statement.

"This includes taking note of industries facing challenges, such as thesituation experienced by the oil and gas industry currently," it said.

This comes after Petronas is reported to be looking at retrenching some of its 51,000 employees to meet targets to cut capital and operating expenditure by a whopping RM50 billion over the next four years.

According to the leaked memo circulating online, BSN staff are instructed to “reject upfront” all personal loans, credit card and hire purchase loans applications from oil and gas industry employees.

“Sales executives (are) to stop marketing and accepting applications from employees from this sector,” the memo reads.

Applications already approved will require further approval from the headquarters, the memo states.

Mortgage loans applications can be subject to headquarters approval, with consideration on a case-by-case basis.

Exception will be given to Petronas employees who are not hired on a contract basis, it adds.