Chong: Priority Should Be Given To The People

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Press Statement By Chong Chieng Jen:

The 6-month moratorium on repayment should come together with waiver of interest by the banks.

As it is now , the decision of the Government to impose a “6-month moratorium on repayment but allowing banks to charge interest during the 6-month period” is not resolving the long term financial problems faced by the business sectors and the people, but is merely postponing the suffering to a later date with an aggravated impact at the end of the moratorium period.

The banks should waive all interests on certain categories of loans during the 6-month moratorium period:

  1. all business loans; and
  2. all housing loans of RM500,000 or below.
  3. all hire-purchase loans on motor vehicles and motorcycles

In this covid-19 pandemic, all business sectors are affected 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. 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”.

More relevant to the people’s interest at hand, these profits of the banks will be at the expenses of their customers who have suffered tremendously because of the pandemic.

Though the present minister of finance 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.

There is no question about banks not being able to sustain with this 6-month interest waiver.

Afterall, the banks can sustain with the 6-month repayment moratorium which include principal repayment. The 6-month interest waiver will only affect the profitability of 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% (the people) versus the 0.01% (shareholders of banks).