Banks’ targeted assistance appropriate

Shan Saeed

KUALA LUMPUR: Banks’ targeted assistance approach to help needy customers is viewed as the most appropriate solution for now as the movement control order (MCO) 3.0 would likely be a short one.

The acceleration of the ongoing vaccination programme to curb the spread of the Covid-19 is expected to result in the drop in the number of cases soon, said an economist.

Juwai IQI chief economist Shan Saeed said with the economic growth outlook to stand at between three and four per cent for 2021, which is highly desirable in the current scenario, both customers and banks needed to assess the position at this point of time.

“All banks and financial institutions are responsible to their stakeholders for their performance and profit earned during the year. It is a very challenging environment during the Covid-19 ambiance and banks need to operate profitably.

“So, providing targeted approach assistance while guiding customers on how to manage their finances and debt going forward would be the smartest way for banks to strengthen customers financial management,” he told Bernama.

Shan suggested that an engagement strategy is the key to make customers comprehend the global economic and financial fragilities.

He viewed that banks should always be ready to provide extra services to their clients in order to capture the mindshare of the clients to build their market share.

“Under the present scenario and in this tempestuous times, the bank should start with hand-holding programmes to guide customers in managing their finances and debt cycles and get them informed of the various available products that can help reduce their finances.

“The banks should also gather strategic market intelligence reconnaissance about global markets to share with customers while sharing reports about interest rates outlook, housing, equities, and bond market landscape opportunities for sophisticated and smart investors,” he shared.

Meanwhile, Bank Negara Malaysia (BNM), in responding to whether another round of moratorium should be given following the recent containment measures, announced the Government said a blanket automatic loan moratorium may not be the best solution.

This was given that most economic sectors are now allowed to operate as compared to last year.

On another note, the Association of Banks in Malaysia (ABM) and member banks under the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) reiterated their commitment to continuing to assist customers affected by Covid-19 and who are facing difficulties in repaying their financing.

The associations said their member banks would continue to make available repayment assistance to affected borrowers as announced previously.

Up to March 26, 2021, approximately 1.6 million applications for repayment assistance had been received, out of which 95 per cent were approved.

They said 55 per cent of the approved applications were given an extension of the loan repayment deferment, while the remaining 45 per cent were given reduction in instalments.

Borrowers who are in need of assistance are encouraged to contact their banks early to discuss repayment assistance options.

As mentioned by BNM, borrowers’ Central Credit Reference Information System (CCRIS) records will not be affected by assistance received for the rest of 2021. – Bernama