KUALA LUMPUR, Feb 1 — Banks need to be more humane in their evaluation of loans and consider the trying times people are experiencing now, said Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah.

“Banks should understand the difficult situations and not take drastic steps. They need to evaluate (loan applications) case by case. The person will get another job to continue paying,” he was quoted telling English daily New Straits Times.

“Should the person get retrenched, banks should restructure the loan like giving him waiver not to pay loans for certain months.

“Even agencies like Credit Counselling and Debt Management Agency (AKPK) can help. (This should be done), not completely stop (giving loans),” he added.

Aside from banks, he also urged CEOs of government-linked companies (GLC) to find ways to increase salaries of their employees to reduce the income gaps of their organisations.

He suggested that increasing salaries should be one of a CEO’s key performance indicators (KPIs) to ensure the matter gets addressed.

“By right, the top management needs to reduce their bonuses as well as allowances and give them to the lower-paid employees.

“This kind of awareness (adopting) the humanising factor into management (should be embraced) so that people will not be feeling left out.”

Local lender Bank Simpanan Nasional (BSN) sent shockwaves two weeks ago after admitting it is restricting loan approvals for those in the oil and gas sector.

A leaked internal memo from BSN showed that the bank has asked its sales staff to outright reject loan applications by those who are working in that sector due to the sector being considered “high risk”.

The memo also said that only Petronas staff with a full time position would be considered for loans.

The decreasing oil price has put a strain on the heavily oil-revenue reliant Malaysian economy, forcing Putrajaya to revise its federal budget for the second year in the row.