I refer to a letter written by M Sulaiman published by FMT today, questioning NUBE’s call for banks to reinstate the blanket loan moratorium for borrowers from the B40 and M40 families.
While we thank him for his response, please allow me to disagree with his opinion for a variety of reasons.
NUBE finds that Sulaiman, who claims to be a retired bank employee and a former NUBE member, has taken a rather simplistic view in objecting to the loan moratorium for those who have jobs.
His views reflect ignorance of what is happening on the ground.
The Covid-19 pandemic has brought a great deal of hardship and financial woes even to the so-called “lucky ones” who have managed to cling on to their jobs in the current economic turmoil.
It must be remembered that the vast majority of workers are in the B40 and M40 category in Malaysia.
I agree that some responsible banks have indeed extended the moratorium for all without any conditions but there are many that have not, and have instead laid out conditions that require customers to provide various supporting documents that are not with them and are difficult to obtain in some instances.
To my knowledge, there is no other repayment assistance given by banks during this period for those in the B40 and M40 group, irrespective of whether they are employed or not.
Many of the workers, indeed even NUBE members themselves, had their family income reduced substantially for a variety of reasons, such as one or more members of their family either having been retrenched or have had their overtime and allowances slashed or frozen altogether.
So, while on paper, they have jobs, the household income of these families have been severely impacted, making it extremely difficult for them to service their loans and support their families.
The targeted assistance scheme which replaced the blanket moratorium in October, comes with conditions that do not take into account the various complex reasons why many workers have difficulty in resuming their loan repayments, despite having jobs.
It is a known fact that banks earn their billions in profit not from service but quite substantially from fees imposed on literally every service offered to depositors. Yet depositors are given pittance in interest and rates.
The banks are not going to go bankrupt by extending the loan moratorium. They may just need to reduce the hefty salaries, bonuses, dividends and income of those in the senior executives and directors’ positions.
The cost of living has escalated many fold since March when the pandemic struck. Consumers are burdened with additional cost to purchase masks, sanitisers, immunity-boosting food, data with higher bandwidth, laptops/tablets as parents work from home and children attend online classes.
Many nurseries, schools and universities have not reduced their fees or other payments that students have to make. Many workers are also avoiding public transportation and using their vehicles to go to work to avoid any exposure to the virus.
Many are also resorting to online purchases to avoid direct contact. All these have increased their monthly expenditure.
This is one of the main reasons why NUBE has been pushing for the reinstatement of the blanket loan moratorium for a specific period of time until the economy is on the road to recovery again and normalcy in the employment sector is restored.
Sulaiman should also understand that a blanket loan moratorium is not compulsory for everyone to accept. Like in the first moratorium, those who can afford it have the option to opt-out.
We are convinced that the banks, which made RM32 billion in profits last year, are strong and resilient enough to defer the collection of their dues for a certain period.
Bank Negara Malaysia has regularly attested to the strong financial standing of the banking sector in helping Malaysians mitigate the impact of the Covid-19 pandemic.
Sulaiman should also not attempt to imply that borrowers who are given the loan moratorium are running away from their obligation to repay their debt.
The moratorium merely means banks will collect payment (and profits) from borrowers later when things return to normal.
A Karuna is the assistant general secretary of the National Union of Bank Employees (NUBE).