MTUC: Moratorium Extension Welcomed but Should Automatically Extend to Six Months for all B40, M40

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The Malaysian Trades Union Congress (MTUC) suggested today that the government automatically extend the loan moratorium by at least six months for all B40 and M40 families irrespective of their employment status.

Despite welcoming the prime minister’s announcement, MTUC secretary-general J Solomon urged the government not to leave the poor and the marginalised at the mercy of banks by forcing them to apply for an extension of the moratorium or amending the terms of their loans or hire-purchase agreements.

“These marginalised B40 and M40 groups are the ones who need most an extension to the current moratorium, as many of them are either without jobs or have been forced to take pay cuts. All of them have been badly affected by the rising cost of living, especially foodstuff during the Covid-19 pandemic.

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“As such, compelling them to apply to banks to grant them an extension to the moratorium, as announced today, is an unnecessary burden and a bureaucratic hassle placed on them in their hour of need,” he said in a statement here.

Prime Minister Tan Sri Muhyiddin Yassin had earlier announced the extension as part of his Perikatan Nasional (PN) government’s effort to help retrenched workers.

In a special address today, he said the targeted moratorium extension will run for three months but only for those who lost their jobs this year and have yet to find employment, after which period banks can further extend the help based on individual situations.

Banks have already given a six-month loan moratorium that will end in September, as part of the PN government’s RM260 billion stimulus package unveiled in April to combat the economic fallout wrought by the coronavirus pandemic.

Solomon pointed out that financial institutions could utilise the Inland Revenue Board’s comprehensive database to approve an automatic six-month extension of the moratorium to the targeted groups.

Citing the stringent documentation requirements imposed by the banks, Solomon said the application process itself will see many deserving B40 and M40 applicants being denied an extension of their moratorium.

He said B40 and M40 Malaysians eligible for government assistance under the Prihatin package should, therefore, be offered automatic extensions on the moratorium based on the same data used by the government.

On the six-month extension instead of the three months announced, Solomon said financial institutions would be able to recuperate eventually and suffer no losses in granting the moratorium as they would be able to collect their dues down the line. – MMO