Charles Kong Soo

The Ari­ma Busi­ness As­so­ci­a­tion (ABA) is call­ing on the bank­ing/fi­nan­cial sec­tors to have a heart and ask that these in­sti­tu­tions show com­pas­sion dur­ing this COVID-19 pan­dem­ic that is neg­a­tive­ly im­pact­ing the coun­try coun­try.

In a re­lease yes­ter­day the as­so­ci­a­tion said it sup­port­ed and com­mend­ed the ini­tia­tives im­ple­ment­ed by the Gov­ern­ment in what they un­der­stood to be un­chart­ed wa­ters.

ABA said "The com­mu­ni­ty and by large the coun­try are ea­ger to re­turn to some sort of nor­mal­cy. How­ev­er, a re­turn to nor­mal­cy for the busi­ness com­mu­ni­ty will prove chal­leng­ing.

"Al­though our nonessen­tial busi­ness­es were closed, the re­cur­ring ex­pens­es for these are sim­i­lar to that of the av­er­age house­hold.

"Key re­cur­ring ex­pens­es such as those list­ed be­low, must be paid re­gard­less if in­come was earned dur­ing the pe­ri­od of clo­sure ini­ti­at­ed in March 2020: • Elec­tric­i­ty • Wa­ter and Sew­er­age • Tele­phone rental • In­ter­net • In­sur­ance • Mort­gage/In­ter­est • Rent • Se­cu­ri­ty per­son­nel • Se­cu­ri­ty mon­i­tor­ing.

"While it is ad­mirable that the Cen­tral Bank has re­duced the re­po rate from 5 per to 3.5 per cent, we are yet to see these re­duc­tions. It would be un­rea­son­able to ask for fur­ther re­duc­tions with­out first ex­pe­ri­enc­ing ef­fects of an al­ready re­duced re­po rate."

The as­so­ci­a­tion said it was note­wor­thy, how­ev­er, that in some parts of the world, the re­po rates ranged be­tween 0 to 0.75 per cent.

ABA said the in­for­ma­tion re­ceived to date sug­gest­ed that in­ter­est rates had not been re­duced or not re­duced to the lev­el ex­pect­ed and that de­fer­rals of­fered by fi­nan­cial in­sti­tu­tions will cost more in the long run. The as­so­ci­a­tion said that they there­fore asked all in­di­vid­u­als, busi­ness­es and house­holds with mort­gages and oth­er loans, to con­tact their bank and en­quire about the ac­tu­al cost of de­fer­rals dur­ing this pan­dem­ic.

ABA said they en­cour­aged them to write to their bank di­rect­ly re­quest­ing these de­tails so they would be aware of their sit­u­a­tion and can ini­ti­ate ef­fec­tive fi­nan­cial plan­ning to se­cure their fu­ture.

The as­so­ci­a­tion said while there was the plea for land­lords to show com­pas­sion for ten­ants who had been re­trenched, ter­mi­nat­ed or had their in­come re­duced due to the pan­dem­ic, one should be mind­ful that some land­lords in­cur the above re­cur­ring ex­pens­es at high­er (com­mer­cial) rates and they too had oblig­a­tions to their fi­nan­cial in­sti­tu­tions.

ABA said many land­lords had com­plied in re­duc­ing their ten­ant’s month­ly rent.

The as­so­ci­a­tion asked that the fol­low­ing be con­sid­ered by those who can ef­fect change dur­ing this cri­sis: • Sav­ings re­sult­ing from the low­ered re­po rate to be di­rect­ly re­flect­ed on Client ac­counts. • Ex­tend­ing tenure on re­pay­ment of mort­gages and loans so month­ly in­stall­ments can be re­duced af­ter de­fer­rals. • Le­nien­cy for per­sons wish­ing to ac­cess a per­cent­age of their pen­sion/an­nu­ities tax free or at least at a sig­nif­i­cant­ly re­duced tax rate so that they may fi­nance them­selves rather than bur­den the state fur­ther. • Re­bates from in­sur­ance pre­mi­ums paid by non-es­sen­tial busi­ness­es for work­men com­pen­sa­tion, cash in tran­sit, pub­lic li­a­bil­i­ty in­sur­ances, etc for the pe­ri­od in which their busi­ness­es were closed as per the Pub­lic Health Or­di­nance af­fect­ed on March 2020.