KUALA LUMPUR: The Employees' Provident Fund (EPF) Account Two support facility is not in the form of collateral offered by a borrower to a bank, said Deputy Finance Minister I Datuk Seri Ahmad Maslan.
He said a bank cannot use a borrower's EPF savings if the (EPF) member or borrower fails to pay his loan instalments.
"Collateral means (a bank) has the right to enforce the collateral when a borrower fails (to repay the loan), meaning if the borrower takes a RM5,000 loan and fails to repay it, (the bank) takes the RM5,000 immediately.
"But this Account Two support facility is not collateral. The lender, that is the bank, cannot use the EPF savings if the (EPF) member fails to pay his loan instalments.
"Members have the right to make withdrawals when they reach the age of 50 or 55 because members are still protected under Section 51 of the EPF Act 1991," he said when winding up the motion for extended EPF withdrawals in the Dewan Negara today.
Earlier, Senator Datuk Razali Idris submitted a motion to debate further the EPF withdrawals in accordance with Article 17 (1) of the Standing Orders of the Dewan Negara.
However, Razali's motion, which was discussed by 12 members of the Dewan Negara, was rejected.
In the meantime, Ahmad also explained that the government did not allow targeted EPF withdrawals for the fifth time because it is responsible for safeguarding the people's welfare.
"If we want to be popular, let's just approve all the withdrawals, just take out RM5,500 or RM3,300 until it (the account) is empty. But this government is responsible. That's why we don't allow it," he said.
The Dewan Negara continues tomorrow. - Bernama