Malaysia's veteran rock singer Suhaimi Abdul Rahman, better known as Amy Search, has hit out at a recent suggestion by Prime Minister Anwar Ibrahim for Employees Provident Fund (EPF) savings to be used as collateral for personal loans, saying the move will only benefit banks which collect interest.
"Borrowing from banks is subject to interest, because no bank lends money without interest as the money belongs to the people (depositors).
"And if you don't pay, the interest increases. Ultimately, the total interest on the loan plus on the late payment will spiral.
"So the banks reap the biggest profit," the singer, best known as the vocalist for the band Search, said in response to a Facebook video on the proposal.
On March 9, responding to growing calls for a special withdrawal from EPF, Anwar again shot down the idea but said he would consider allowing contributors to apply for bank loans using their savings in the retirement fund as collateral.
He said this was the best way to help people in the present circumstances.
Amy warned that in this scenario, any failure to settle a bank loan would result in the seizure of EPF savings.
"What does the bank care? Everything is stated in the signed agreement. Be careful my friends, don't let your EPF money run out due to interest.
"So borrowing money from the bank by making EPF savings collateral is not a wise move," he added.