Borrowers should engage with banks to seek right advice on repayment assistance — BNM Governor

KUALA LUMPUR (May 11): Loan moratorium may not be the best solution for all borrowers as they should engage with banks to seek the right advice to suit the borrowers’ circumstances and best interest, according to Bank Negara Malaysia (BNM) Governor Datuk Nor Shamsiah Mohd Yunus (pictured).

Commenting on the possibility of another round of loan moratorium, the central bank’s governor highlighted the banks continue to provide financial assistance to affected borrowers and highlighted that a total of 1.6 million applications for repayment assistance have been facilitated by the banks with an approval rate of 95% as of March 31 this year.

“BNM and the Credit Counselling and Debt Management Agency (AKPK) have also supported over 47 thousand borrowers to help them manage their debt obligations. 

“On top of that, borrowers’ CCRIS (Central Credit Reference Information System) record will not be affected by the financial assistance for the rest of the year,” she said during a BNM’s 1Q virtual briefing announcement today. 

Meanwhile, Nor Shamsiah also highlighted that the federal government has the fiscal space to support the local economy amid the recent implementation of the Movement Control Order (MCO 3.0). 

“Following the announcement of the Pemerkasa stimulus package, our statutory debt is expected to stand at 58.5% of GDP by the end of 2021. As it is still below the statutory debt ceiling of 60% of GDP, there is still fiscal space to support the economy. 

“Also important is that the previous stimulus packages were carefully designed to be targeted and time-bound, emphasising on policies with high multiplier impact while balancing the need to fiscally prudent,” she added. 

The central bank also pointed out that the government has reiterated its intention to rebuild the fiscal buffers that have been utilised during the pandemic once the nation recovered from the crisis.

“This is evident in the government’s commitment to fiscal consolidation plan as outlined by the medium term fiscal framework as well as fiscal reform measures which will include the tabling of the Fiscal Responsibility Act by the end of this year,” she said. 

Yesterday, the National Security Council (MKN) agreed to enforce the MCO nationwide, effective May 12 to June 7. All economic sectors are allowed to operate during the period as the government decided to take stricter measures to curb the spread of the Covid-19.

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