KUALA LUMPUR: The government has agreed to implement an auto-approval mechanism for the moratorium on loan repayments for those in the B40 group as well as micro and small-medium enterprises (SMEs).

This means that those in the B40 income group and micro SMEs do not need to submit any documents to be entitled to the three-month moratorium which will be implemented till December this year.

"Those in the B40 income group and micro SMEs will also have their respective applications approved by banks within 24 hours. No documents," said Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.

Tengku Zafrul was speaking during his winding up speech on Budget 2021 in Parliament on Thursday (Nov 26).

He also said those in the M40 income group only need to make a document-free declaration at their respective banks and it will be approved within one to five days.

Tengku Zafrul said more than 700,000 Malaysians have applied for the second moratorium phase, which is now under Budget 2021.

He said the government would continue to engage banks over the moratorium although 85% of those who benefited in the first phase of the moratorium had begun repaying their loans.

The first phase of the moratorium was for a period of six months from March to October this year.

Under Budget 2021, Tengku Zafrul announced that B40 and small and medium enterprises (SMEs) could opt for a three-month moratorium or a 50% reduction of their monthly instalments for six months.