Improvements by regulators, industry players effective economic buffers against COVID-19
23 Jun 2020
Regulators and industry players have put in place a lot of improvements, since the last economic crisis, in their respective sectors in terms of policy, operational matters, manufacturing and businesses, which have proved to be effective economic buffers against the negative effects of COVID-19.
SME Bank group president and chief executive officer Aria Putera Ismail said in the perspective of the banking sector, lessons learnt from the economic crises and the improvements adopted have enabled liquidity to remain strong.
“This is a very good signal and it plays an important role in maintaining the interest of foreign investors. When we look back to 1998, foreign investors packed up and left, but right now, they are still here.
“The strong liquidity in the local banking sector can be attributed to Bank Negara Malaysia’s (BNM) various preemptive initiatives and policies. Banking customers can find relief in that,” he told Bernama TV’s Ruang Bicara programme on the short-term National Economic Recovery Plan’s (PENJANA) yesterday.
The previous economic crises, such as the Asian financial crisis and subprime mortgage crisis, were specifically related to the environment, region or country itself.
However, Aria Putera said the economic crisis resulted from the COVID-19 pandemic was a global issue.
On the government’s Prihatin Rakyat Economic Stimulus Package 2020 and PENJANA, he said the first initiative was designed to ensuring the people have the financial strength to carry on their daily lives, while the second was aimed at stimulating the economy and achieving a new traction.
“Even though this ‘new traction’ is still not significant, the government still managed to activate the economy with the launch of PENJANA. We are on the right track,” he said.
Under PENJANA, loan moratorium was provided to the people to stabilise their lives and economy by deferring their loan commitments.
While the initiative is beneficial for the rakyat, he said this would cause losses to banks as it would disrupt their financial flows.
“At SME Bank, our team recognises the importance of this initiative to the people and we have agreed to it because it is the least contribution that we can do,” he said, adding that the bank would carry out a restructuring programme for its customers to guide them on loan repayment once the moratorium period is over.