Guan Eng questions Finance Minister over reasons given for not providing automatic M40 loan moratoriums

KUALA LUMPUR, June 6 — DAP secretary-general Lim Guan Eng today questioned the Finance Minister over the latter’s statement that the government will have to compensate banks if it compels them to give out automatic loan moratoriums to the M40 income group.

Lim said the banks’ history of reaping high profits, and the fact that they are giving automatic loan moratoriums for B40 borrowers — with no news of compensation received from the government — means they can do the same for the M40.

“Don’t forget and let the M40 fall just like that, because the banking industry is able to bear the cost of automatic loan moratoriums to M40 borrowers,” Lim said in a statement.

According to Lim, local Malay daily Sinar Harian had reported Datuk Seri Tengku Zafrul Abdul Aziz as saying according to Section 5 of Emergency (Essential Powers) Ordinance 2021 the government will need to provide compensation for any resources that it requests during the Emergency.

Zafrul had reportedly said that the compensation the government would have to give banks if it compels them to provide automatic loan moratoriums for the M40 would be too costly, and he would rather use the funds to help the public in other ways.

“If this is true, why banking institutions can bear the cost of automatic loan moratorium for B40 borrowers without any compensation from the government, but not for M40 borrowers?” he asked.

Lim also pointed out that the banking industry had recorded after-tax profits of RM32.3 billion in 2019 and RM23 billion in 2020.

“It is obvious that banking institutions are capable of performing corporate social responsibility with such high profits.

“During an economic recession, it is necessary and desirable that the financial problems of borrowers are shared along with banking institutions that posted such good profits throughout 2019 and 2020,” he wrote.

Tengku Zafrul, on June 3, had stated that all in the B40 income group are eligible for loan moratoriums, while those in the M40 and T20 will be eligible if they have experienced a reduction of income during the pandemic.