Finance Minister: Banks will suffer estimated loss of RM6.4b in total over loan moratorium

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz at a press conference in Putrajaya May 8, 2020. — Bernama pic
Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz at a press conference in Putrajaya May 8, 2020. — Bernama pic

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KUALA LUMPUR, July 27 — Malaysia’s banks are estimated to suffer a loss of RM1.06 billion monthly, owing to the six-month loan moratorium period, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said today.

Tengku Zafrul told Parliament that collectively, banks will suffer an estimated loss of RM6.4 billion until the moratorium ends.

Last week, Tengku Zafrul said that borrowers must begin servicing their loans from October as the repayment moratorium will end as scheduled in September.

He told Parliament that banks will instead take a targeted approach in helping borrowers restructure their existing loans.  

“I would like to remind that Malaysia is the only nation which executed an automatic moratorium for six months for the welfare of the people and businesses. Up until now, 7.7 million people or 93 per cent of individual borrowers, alongside more than 243,000 businesses or 95 per cent of borrowers are enjoying the benefits of the moratorium.

“Efforts to help borrowers must be balanced with efforts to ensure that the financial institutions would remain resilient, so that they can continue to fund economic activities and help with efforts to recover the economy,” he added.

Tengku Zafrul said that although the moratorium did not cover credit card debt, banks still helped by lowering the usual interest rates.

He was responding to his predecessor Lim Guan Eng (DAP-Bagan) who asked a supplementary question on the losses suffered by banks owing to the moratorium.

Lim also asked if the government would consider extending the moratorium for another six months, if no losses were suffered by the banks.

During the Questions and Answer session, Tengku Zafrul said that the moratorium had also reduced the bank’s capability to provide new loans to borrowers by RM79 billion.

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