KUALA LUMPUR, March 25 — The Malaysian Trades Union Congress (MTUC) has requested Malaysian banks to provide some form of flexibility to credit card holders affected by the Covid-19 fallout, who may be facing difficulty in settling their monthly dues.
MTUC secretary-general J. Solomon said this is necessary as most transactions are now done through credit card and online in view of the ongoing movement control order (MCO).
“In addition, the interest on the credit card is the highest right now as it could go up to 18 per cent per year,” he said in a statement.
Solomon was referring to Bank Negara Malaysia’s (BNM) order yesterday of an automatic six-month moratorium on all bank loans except for credit card balances, for those affected by the Covid-19 outbreak.
He praised BNM for asking banks to convert outstanding credit card balances into term loans of not more than three years, urging them to also consider abolishing late payment penalties and reducing monthly interest charges for one year to further ease the household expenses of Malaysians.
“Overall MTUC welcomes the move by BNM as its directive has brought huge relief, especially to low-salaried individuals and small and medium enterprises which are suffering due to the devastating impact of Covid-19 on the global economy, public health as well as the livelihood of people.
“However we strongly urge Bank Negara to ensure individual customers and businesses do not incur any extra interests or payment of any kind in taking up the six months’ automatic moratorium on loan payments. Only by ensuring there are no hidden costs, will the moratorium be meaningful and have its desired impact,” Solomon said.
The secretary-general also urged banks to quickly come out with clear guidelines for customers on how they will implement BNM’s directive, and suggested BNM advise banks to suspend their collection department immediately.
“Malaysians are already struggling to manage the pandemic crisis mentally and with loss of overtime and commissions and it is inhuman to further remind them to pay up instalments. This is not the time to be concerned about rise in non-performing loans but rather to prevent the rise in Covid-19 victims and deaths.
“MTUC hopes the banks continue to display goodwill, compassion and empathy by ever willing to respond to further help the rakyat as and when the need arises,” he said.
In announcing the moratorium, BNM deputy governor Jessica Chew said the measure is designed to ease the cash flow of SMEs and individuals that are likely to be most affected. The six-month period commences next Wednesday (April 1).