Post-Covid plans now part of business loan review by banks

KUALA LUMPUR, 10 July 2020:

Banks are putting in place a new credit assessment methodology before granting any facility to any potential borrowers, according to Bank Simpanan Nasional Bhd’s (BSN) chief business officer Mujibburrahman Abdul Rashid.

The banking institutions according to him, are now looking at the borrowers’ future strategies especially on how they mitigate Covid-19 related impacts instead of relying solely on past historical data to determine the feasibility of their loan applications.

“We will look at your action plans. Let’s say if there is a second wave of Covid-19, what is your business and marketing strategies that you can put in place to ensure this time around you are more resilient and are you ready for that?”

During a panel session at Domestic Tourism In The New Normal Webinar yesterday, Mujibburrahman urged local tourism players – whose businesses are impacted by Covid-19 – to opt for loan or financing rescheduling and restructuring (R&R).

He said many industry players had the inaccurate perceptions that R&R is an element of default, hence, shun away from seeking that financial assistance.

“No, R&R is not an element of default but a relief to help business owners to ease their burdens.”

He said seeking R&R assistance would not only help to ease the burden of business operators but also assist in reducing banks’ credit cost to ensure the entire banking landscape could continue in helping the tourism sector moving forward.

Mujibburrahman said industries, including tourism which are badly impacted by COVID-19 should seek financial assistance to ensure the sustainability of the country’s economic landscape.

“We cannot live by just eliminating certain sector, for instance, tourism sector which has been hit hard by COVID-19, because by doing so, we are killing the entire country.

“We need to protect all the important segments which are contributing to the country’s gross domestic product growth and job market.”

He also urged more communications and coordinations engagement between banks and industry players to ensure a win-win situation so that both parties could progress further in post Covid-19 period.

Recently, Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri said tourism is one of the hardest-hit sector by the Covid-19 pandemic. The industry is expected to lose about RM45 billion in the first half of this year.

Separately, Gibraltar BSN Life Bhd has decided to extend the Customer Relief Programme to Dec 31 – in line with the government effort to stop the spread of the Covid-19 outbreak.

Chief executive officer Rangam Bir said the Customer Relief Programme – which was launched in March – includes a three-month premium deferment option for eligible customers as well as an expansion of Covid-19 coverage for some of its products.

“The recent global Covid-19 pandemic has highlighted the importance of being prepared for unexpected events that can result in undue financial burden on the family.

“As Malaysia’s Community Protection Champion, we are particularly concerned that only three out of ten Malaysians have life insurance coverage and we wanted to communicate that taking care of you and your families’ protection needs are now more important than ever,” he said in a statement.

In addition, Rangam said Gibraltar BSN also recently launched a free monthly Wellness Webinar series to help customers equip themselves with tools to navigate this difficult period as customers’ physical and mental well-being is paramount to all at Gibraltar BSN.

– Bernama