The government will allow CPF Board members to borrow money from banks by pledging their CPF deposits.
Prime Minister and Finance Minister Datuk Seri Anwar announced during the Budget debate in Parliament that the government will allow CPF Board members who are in dire need to borrow money from banks with the security of the CPF Board.
Anwar pointed out that the CPF is supposed to be a pension savings fund, but to help members in need, the government will allow members to use their CPF savings as collateral to apply for a loan from a bank. However, Anwar did not elaborate on the implementation plan and details of the scheme.
The issue of whether to allow people to withdraw money from their CPF accounts again has become a hot topic. A number of MPs have called on the government to introduce a targeted CPF withdrawal scheme so that only those who really need it can apply for withdrawals. Some MPs pointed out that instead of letting people in distress borrow from loan sharks, they should be allowed to withdraw money from their CPF accounts.
Prime Minister Datuk Seri Anwar had previously said that many members’ CPF savings were already very low and that the government needed to find other ways to assist these low-income groups rather than allowing people to withdraw from their CPF accounts again.
In terms of ethnicity, the median CPF savings of indigenous people decreased from RM15,541 to RM4,937, the median CPF savings of Chinese people decreased from RM45,756 to RM45,162, and the median CPF savings of Indian people decreased from RM25,724 to RM4,937. The median CPF deposit for Indians decreased from RM25,724 to RM14,926.
