Recently, Domestic Trade and Cost of Living Minister Datuk Seri Salahuddin Ayub had voiced his desire to expand the Menu Rahmah initiative to the corporate and banking sectors. Hats off to him - in truth, he must be a brave man to even moot such an idea!

Actually, getting banks (especially commercial banks) to partner in the initiative is certainly a laudable move even though it must have raised a few eyebrows especially among the doubters. Why? 

Well, to be brutally frank, banks are not as approachable as they used to be, say, thirty years ago. Nowadays, when you make a call to the bank, chances are, you will be put on hold (while they play you some oldies)… or their interactive voice response (IVR) will lead you from one confusing menu to another until you finally give up!

Of course, the brutal reality is that banks, like all businesses in general, need to maximise their profit in order to grow - it's not really to help anyone as their heart-touching advertisements may want "suckers" (like us) to believe. Maybe that's one of the reasons why some may refer to the banks as "blood sucking monsters", "heartless ah longs" etc. The list goes on!

With this in mind, perhaps the question the minister might need to pose upfront to the banks before any negotiations can commence would be "beyond merely contributing, are they willing to voluntarily sacrifice a small part of their profit, just like the other Menu Rahmah participants?" 

No doubt, many would have observed how during the Covid-19 pandemic, banks were reporting "obscene" net profits annually when small businesses and ordinary people everywhere, including their own customers, were struggling to stay afloat. Come to think of it, even the loan moratorium they offered "rather reluctantly" cannot be considered as a sacrifice as they were merely deferring their interest income (profit).

Another important caveat: It's strongly advisable to get Bank Negara Malaysia (BNM) involved in all negotiations with the banks or else the whole exercise may turn out to be a dead rubber! Why? 

It's because without the presence of BNM (the so-called "big brother") the banks will likely just wash their hands off and offer their standard reply - "sorry, we are unable to help as we'll be answerable to our shareholders."

Of course, to be fair to the banks, they are obliged to be cautious when extending any form of aid as there are many opportunists and fraudsters out there (even in the B40 group) who may abuse the financial assistance given to them by splurging on vacations, car sports rims and even canggih hand phones!

Still, there are many ways banks, with all their financial prowess can contribute in alleviating the hardship faced by the B40 group not just during this difficult period but also in the longer term. 

Loan Repayment Holidays 

Debt repayments, especially housing loan installments is where many in B40, with their meager net disposable income, may need urgent help. Admittedly these "repayment holidays" (aka moratorium) was offered during the pandemic and it turned out to be a lifesaver for thousands of badly affected families. 

Perhaps, it could be reintroduced, but this time to "selective, deserving cases" only and for shorter tenure - for example to those who have recently lost their jobs or whose businesses have been adversely impacted due to cost of living factors etc. Certainly, it should not be offered across the board to all borrowers! 

Specially Restructured Loans 

There are many who might be finding it difficult to service their loans or facing bankruptcy or even foreclosure proceedings where they risk losing practically everything in life - including the roof over their heads! 

Typically, these are people who have been incapacitated by illness, retrenched or struggling with reduced income (including those forced to pivot to gig jobs like e-hailing, food delivery etc). For this selective category of people, banks can come out with a mechanism to identify them (probably from defaulters' list) and automatically restructure their loans by offering lower instalments. 

It's also important that this restructuring exercise is done with the minimum of red tape. Of course the trade off would be that these borrowers will not qualify for any more loans until their existing loan is fully settled! Banks might also benefit as they may be able to bring down their impaired loans figures. 

Convert Credit Cards With Habitual Over-limit Utilization To Term Loans

Some might claim that credit cards are amongst the greatest evils in life. Though that may seem like an exaggeration, yet to many it has been the source of untold misery leading to broken marriages, mental breakdowns and bankruptcies.

The problem is that for some who have easy access to credit lines, they tend to use credit cards to buy items they cannot afford - no thanks to enticing ads and the growing number of influencers who appear to reign supreme in social media! 

The other thing is that, for credit cards, the finance charges can go up to 18% per annum! So naturally, banks tend to go all out to promote the usage (offering all sorts of freebies!) as it will generate a lucrative income for them. 

However, for those with tight finances and who lack financial discipline or who are impulsive buyers, credit cards can turn out to be the "stairway to hell!" So this is where banks can help out by converting hardcore credit card users' lines to term loans - with reasonable interest rates, of course! Thankfully some responsible banks may have already started implementing this. Kudos to them. 

Waive Nuisance Fees

Banks generally love non-interest or fee-based earnings as they may represent a captive income stream for them. But often they tend to go overboard by arbitrarily imposing what some may call "nuisance fees" - as an easy way to boost their bottom line?

This may include charges related to opening and closing of accounts, ATM withdrawal fees as well as charges on dormant accounts and of course the dubious "maintenance fees!"

Many banks also charge facility and processing fees for loans and overdraft applications! But shouldn't all that be part of their costs of doing business? (Imagine, if restaurants start charging us separately for cleaning our chairs, tables and plates?) And what about excessive penalties or late charges for arrears in repayments? Don't that reek of profiteering?

Perhaps all these may explain why certain banks who are notorious for their substandard service quality can still report impressive annual net profit in the millions. Considering all that, shouldn't banks be instructed to do away with at least some of these "nuisance fees" for those in the B40 (and maybe even for the rest!)?

A Hybrid Housing Loan-cum-Savings Product?

Finally, how about seeking out-of-the-box solutions - like what they may not necessarily teach you in top business schools in the US and Europe? It may sound crazy but maybe banks can come up with a unique hybrid housing loan product for the B40 group where a small sum is incorporated into their monthly loan repayment which is then channeled back into a special savings account under the borrower's name linked to the loan. This savings account cannot be touched for a specified period of time. Even though it may only represent a small sum it may still act as forced savings especially for those with very little left in their EPF. 

But then, does our unity government and Bank Negara Malaysia have the political will to "rewrite" conventional banking textbooks and come out with innovative policies that resonate with the realities on the ground in the post-pandemic, digital era? 

In closing, hundreds of small restaurants and even popular fast-food joints have shown a willingness to sacrifice a bit of their hard-earned profit to participate in the Menu Rahmah initiative to help the poor. In that context, wouldn't it be a real shame if banks, who rake in billions of ringgit in net profit annually, are not willing to do the same for their affected customers?

Admittedly, not many would be expecting banks to agree to any significant concessions under the Menu Rahmah initiative. Still, wouldn't it be a great relief, if those so-called "blood-sucking" monsters suddenly turned into "blood-donating" monsters instead?

JK Joseph is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!

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