With new Covid-19 wave, Nube wants blanket moratorium extension
The National Union of Bank Employees (Nube) has joined the chorus calling for the government to reinstate loan moratoriums, citing weaknesses in the current targeted approach.
In a statement today, Nube secretary-general J Solomon said a survey of union members found that while most of them have kept their jobs, many had family members who were either retrenched or had their salaries slashed.
"This situation rings true not just for Nube members but also applies to...
The National Union of Bank Employees (Nube) has joined the chorus calling for the government to reinstate loan moratoriums, citing weaknesses in the current targeted approach.
In a statement today, Nube secretary-general J Solomon said a survey of union members found that while most of them have kept their jobs, many had family members who were either retrenched or had their salaries slashed.
"This situation rings true not just for Nube members but also applies to hundreds of thousands of low-income households across Malaysia.
"Job losses and pay cuts to one or more members of such families pose a tremendous burden on their ability to service loans and at the same time, have enough money to put food on the table," he added.
In view of this, Nube recommended that a blanket moratorium be imposed on housing, vehicle, and personal loans for B40 and M40 families for at least three months.
B40 refers to the bottom 40 percent of income-earners, M40 the middle 40 percent, and T20 the top 20 percent.
The union also urged the government to periodically review this policy based on prevailing economic and employment situations, warning that experts such as the Asian Development Bank had warned of further headwinds, more so after a recent spike in Covid-19 cases.
"It will not cost the bank much as they will recoup the deferred payment eventually. But it can be disastrous to the poor.
"Forcing these financially hit families, including those of Nube members to resume servicing their loans from this month, is tantamount to ignoring the hardship and suffering on the ground - something which the targeted moratorium with its slew of conditions attached, has failed to address," said Solomon.
A weak economy coupled with a weak labour market, he said, will likely make it harder for many to resume loan repayments and warned that this can lead to an increase of non-performing loans (NPL).
"An increase of NPL can spiral into a full-blown crisis for the banking sector as well as the government," he added.
In March, Putrajaya brokered a deal for banks to allow borrowers to defer loan repayments for six months. This scheme expired on Sept 30.
A new scheme was drawn up to allow only those who have lost their jobs to extend their loan moratorium period to Dec 31 and those who can prove reduced income to pay lower instalment amounts in tandem.
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