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Federal Government will consider states' requests for loan restructuring, rescheduling


© Jurairat Saechan/ 123RF

22 May, KUALA LUMPUR – The Federal Government is prepared to consider applications from the state governments for loan restructuring or rescheduling to assist the states facing financial difficulties in making repayments.

In a statement today, the Finance Ministry (MoF) said the matter was brought up during the National Finance Council’s meeting held in line with Article 108 of the Federal Constitution.

“The meeting was to discuss matters involving the state governments’ financial management and related issues. Today’s meeting covered several matters of common interest for the Federal and state governments,” the ministry said.

The National Finance Council also agreed to approve RM350 million in contributions to the State Reserve Fund for 2022 to fund the Economics, Infrastructure and Welfare Development-Based Grants (TAHAP).

“The council has also agreed to channel the TAHAP contributions directly to all state governments at the start of each year starting 2021. The initiative shows the Federal Government’s commitment and concern to assist low-income states in implementing projects that will benefit the people,” he said.

At the same time, the Federal Government always ensures state roads are well-maintained for the public’s safety and comfort.

Therefore, MoF said, it had agreed to improve the Malaysia Road Record Information System (MARRIS) by expanding its approved budget and raising the current allocation limit to 20 per cent or RM50 million, whichever is lower, to cover maintenance works for federal roads/culverts, utility preparation or rerouting as well as the care of roadside trees.

The ministry said following the impact of COVID-19, the government had decided that the MARRIS allocations for 2021 be given fully even if the state governments had not reached 85 per cent of spending for 2020.


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