Former finance minister Lim Guan Eng has rebutted his successor Tengku Zafrul Abdul Aziz’s claim that Putrajaya cannot compel banks to extend the automatic loan moratorium to the M40 (middle 40 percent income earners) group.

Lim said there are various laws that give the federal government authority over banks but noted Putrajaya could use the emergency to force banks on the moratoriums.

“This dispute can be easily resolved by...