Government not considering allowing EPF members to use savings as collateral for bank loans (updated)

KUALA LUMPUR: The government is proposing to introduce a program that would allow Employees Provident Fund (EPF) contributors to apply for bank loans by using their pension funds as collateral.

Prime Minister Datuk Seri Anwar Ibrahim (Picture) however said this facility would only be for those in dire need of cash.

“Basically, I do not agree that special withdrawals from the national pension fund are allowed.

“However, I will ensure that the EPF gives pressured contributors with savings room to borrow from banks, using their EPF money as collateral for the loans,” he said at the close of the Supply Bill 2023 debate in Dewan Rakyat Today.

Anwar said it is the best way to help contributors under the current circumstances, as many countries that have granted easing such as pension fund withdrawals have canceled such facilities.

Anwar also criticized opposition figures who portrayed the unity government as repressive in their debates.

He said grants and financial aid awarded to states, including those administered by the opposition, increased this year compared to previous years.

“Kelantan was allocated RM351.5 million, Terengganu RM411.1 million, Perlis RM154 million. Then one compares with Sabah and Sarawak.

“It’s not fair to compare with Sabah, Sarawak because they came together later to work with Malaysia, their rural areas lag far behind, much worse than poor areas.

“This is not a question of political interests; I am consistent on this matter. If we spend RM10 million, we have to add RM100 million in Sabah and Sarawak,” said Anwar, who is also finance minister.

The government also provided development allocations totaling RM6.2 billion to Kedah, Kelantan, Terengganu and Perlis this year.

The Supply Bill 2023, the first budget presented by the Anwar government, was then approved at the political level after a six-day debate starting February 27, with all ministries holding final meetings.

On February 24, Anwar unveiled the country’s largest-ever budget of RM388.1 billion, with RM289.1 billion for operating expenses and RM99 billion for development spending, including RM2 billion as a reserve for contingencies.

According to the Dewan Rakyat calendar on Parliament’s website, the bill will be discussed in committee for 10 days starting Monday (March 13). -Bernama