Finance Ministry asks banks to offer interest-free loan moratorium for 3 months

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The cabinet has agreed to ask banks to offer interest-free loan moratoriums as part of the government’s agreement with Pakatan Harapan (PH), Finance Minister Tengku Zafrul Tengku Aziz said today.

“The Ministry of Finance has asked banking institutions to make efforts to arrange for interest-free payments for moratorium recipients with immediate effect.

“This involved moratorium recipients from the bottom 50% group of Malaysians and would be for a period of three months in the fourth quarter of 2021,” Tengku Zafrul said in a statement.

Other major financial decisions the cabinet agreed upon at its September 10 meeting are increasing the Covid-19 fund and statutory debt limit.

The fund will be raised from RM65 billion to RM110 billion, with amendments to the Temporary Measures for Government Financing (Coronavirus Disease 2019) Act 2020 to be tabled next month in Parliament, the senator said.

The federal government’s statutory debt limit will be raised from 60% of GDP to 65%, and this is to be tabled in Parliament as well.

The RM45 billion increase for the Covid-19 fund has been a specific PH demand since last year.

The opposition coalition signed a memorandum of understanding (MOU) on transformation and political stability with Prime Minister Ismail Sabri Yakob yesterday.

Strengthening the country’s Covid-19 response is one of the broad areas in the MOU.

Other areas cover institutional and parliamentary reform, judicial independence, and the Malaysia Agreement 1963.

Specific reforms include implementation of an anti-party hopping law, Undi18 and automatic voter registration, and limiting the prime minister’s term of office to 10 years.

In exchange, PH will not disrupt voting or support for major government bills in Parliament, while the government agrees not to dissolve Parliament before July 31, 2022.

The MOU also will not impede PH’s role to provide checks and balances of the government.

Tengku Zafrul today said Budget 2022, to be tabled on October 29, will be geared towards speeding up economic recovery.

One of the points of agreement in the MOU is that PH will be consulted during the budget’s drafting stage. – TMI