By New Straits Times - May 1, 2020 @ 2:37pm
KUALA LUMPUR: The Malaysian Trades Union Congress (MTUC) has called on the government to revoke Bank Negara Malaysia (BNM) approval for banks to penalise borrowers who opt to settle their six-month moratorium on their hire-purchase loans after October.
Congress secretary-general J. Solomon also said the central bank must also explain its rational of giving the approval which clearly goes against the government's proclamation that it would do everything possible to lighten the financial burden of workers and the public in general who are suffering from the economic fallout of the Covid-19 pandemic.
He said that BNM and the banks add insult to injury by stating that borrowers would not have to pay any interest if the deferred loan payments are settled in October, at the end of the moratorium period.
"How many people in present day would have the means to do so, given the economic fallout, job retrenchments along with pay cuts that are taking place across the country.
"This is an inhuman move by BNM and banks to further squeeze consumers in every way possible, without any regard for the welfare of the people," he said in a statement today.
Solomon said as recently as March, Bank Negara had stated that Malaysia's banking system has sufficient liquidity to ease financial strains and support intermediation activities to contain the impact of Covid-19 pandemic.
Therefore, he said the government needs to seek an explanation from the central bank on its justification in giving such inappropriate approval for banks to commit nothing short of another daylight robbery on borrowers already at their wits end.
He said that if the banks were allowed to charge interest on the deferred loan payments, borrowers could end up paying thousands of ringgit in Annual Percentage Interest as stipulated in their HP agreements.
"This is money they can ill afford to give away, give their dire situation," he said.
"We had praised Bank Negara and banks as well as the government when the six month moratorium was announced with little conditions attached. In just a few weeks, there is a clear U-turn on the part of the banks with BNM as a willing accomplice in imposing 'penalties' on those unable to settle their deferred instalments by October," Solomon said.
He said the move was the unkindest cut by the banks and BNM on the public, many of them who were workers suffering from the impact of the prolonged Movement Control Order and the economic fallout of Covid-19.
"The government, especially the Finance Ministry must intervene and revoke this approval given by Bank Negara. Failure to do so will greatly damage public confidence in the government's assurances that it would safeguard the welfare of the rakyat at all times," he said.
He said that one of BNM's mission statement was to achieve sustainable economic growth for the benefit of the nation through promoting a work culture which emphasises the highest standards of professionalism and integrity.
"BNM's conduct in this episode is bereft of any integrity and clearly goes against the central bank's core pledge and tantamount to sabotaging the government and the rakyat," Solomon said
He said during trying times, the government must not hesitate to take stern action against any entity, be it public or private, which causes the rakyat to suffer.
"MTUC deems Bank Negara's decision to enable banks to impose unfair penalties on deferred loan payments as a totally unconscionable act.
"BNM and the banks under its ambit have committed economic betrayal against the rakyat, inflicting more hardship on them, merely to reap immoral profits," he said.
Source : https://www.nst.com.my/…/mtuc-urges-govt-intervene-banks-po…