Is Ending Moratorium Crucial for Economic Recovery?

“It is imperative for the country to move out of the moratorium period in order for the economy to begin recovery”, CIMB Group Holdings Bhd CEO Abdul Rahman Ahmad said during a media roundtable session with selected bank CEOs and Credit Counselling and Debt Management Agency (AKPK).

Following that statement, the banks CEOs in attendance during the media roundtable urged those who are unable to manage their loan repayments after the moratorium period ends on Sept 30 to come forward and seek help from their respective lenders.

 

Source: www.thestar.com.my

 

Meanwhile, Bank Islam CEO Mohd Muazzam Mohamed advised borrowers to be prepared to review their spending levels from the next month onwards, since their disposable income will be reduced as they resume repaying their loan instalments.

 

“We understand that in the last six months, spending and expenditure patterns may have changed for some people. But now is the time for them to revisit their financial planning so that they can continue repaying debts from October onwards,” he said.

 

According to Bank Rakyat CEO Datuk Rosman Mohamed, civil servant borrowers will begin to see their salaries automatically deducted from Oct 1, 2020 to pay for loan instalment and that their disposable income will return to pre-moratorium levels.

 

We all want to get back to pre-moratorium period. We all want to settle our debts to our lovely compassionate banks! But we don’t have the means! Talk to the banks?

 

Let me share my experience. One major bank suggested my business cannot have any further moratorium but will consider 50% of the instalment due. It is not just interest but interest and partial principal payment. This was communicated over three weeks ago from end September 2020 (moratorium period over). I have submitted lasted audited accounts and management accounts to the bank. There was no response to-date from the bank. Meanwhile, full instalment will resume on 1 October 2020. 

 

On 29 September 2020, the Star reported Singapore’s central bank was in discussion with lenders about extending debt moratorium programme beyond 31 December 2020. MAS is suggesting  another six months to June 2021. Why? To avoid the so called “cliff edge effect” once relief measures end. That’s response for you from a  regulator!

 

References:

1. Ending moratorium is crucial for economic recovery, Focus Malaysia, 25/9/20

2. Singapore regulator, banks in talks to extend debt relief scheme, The Star, 29/9/20