How much is the proposed blanket loan moratorium expected to cost banks?

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Proposed Blanket Loan Moratorium Estimated to Cost RM6.4 Billion

The collective of over 400 business and civil society organisations has estimated that a proposed blanket loan moratorium would cost Malaysian banks RM6.4 billion. This figure represents a significant portion of the financial institutions' profitability.
Financial Impact on Top Local Banks

This estimated RM6.4 billion cost is calculated to be 7 per cent of the total annual profits of the top eight local banks over the last three years. Furthermore, it accounts for 20 per cent of the profits these banks collectively made in 2020.
Banks' Capacity for Moratorium

The groups advocating for the moratorium assert that Malaysian banks possess the financial capacity to absorb such a cost. They point to the banking system's collective profit of RM93 billion over the past three years as evidence of their ability to extend relief.
Broader Moratorium Coverage Advocated

Beyond the financial cost, the organisations are advocating for a broader scope of the moratorium. Their proposal includes zero-interest opt-out options until December 31, 2020, or until herd immunity is achieved, whichever comes first, and aims to encompass all individuals and businesses in need, not just specific income groups or micro-enterprises.

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How much is the proposed blanket loan moratorium expected to cost banks?

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