Banks could incur RM79 bln modification loss over moratorium period – Tengku Zafrul

Datuk Seri Tengku Zafrul Tengku Abdul Aziz – Bernama file photo

KUALA LUMPUR: Banks are expected to incur a modification loss of RM79 billion over the six-month moratorium period from April to September, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

The amount is the total the banks can lend individuals and businesses in a normal business situation over the six-month period, he said.

“Over the six-month moratorium period, total losses are expected to reach RM6.4 billion, equivalent to the reduction in the banks’ capacity to disburse new loans worth RM79 billion whether to the people or to borrowers.

“To ensure the people continue to be protected if the Movement Control Order (MCO) period is extended, the government will continue to monitor the situation and the latest developments, and will take the necessary action as has been done previously,” he said at the Dewan Rakyat today.

Tengku Zafrul, who was responding to a question from Lim Guan Eng (DAP-Bagan) on whether the loan repayment moratorium would be extended by another six months, said the country’s banking system is estimated to incur lose RM1.06 billion under the Malaysian Financial Reporting Standards (MFRS) 9 for every month the moratorium is extended. – Bernama

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