Bank Negara should be more flexible with banks
FocusM | 05 Apr 2019 00:30
The latest figures from Bank Negara show that loans by banks softened to 5% in February from 5.7% in January. That’s a significant reduction in growth.
The central bank said consumer loans eased sequentially. The slowdown was largely due to residential mortgages which accounted for some 60% of total con- sumer loans. Even loans for passenger car purchases fell.
Interestingly, credit card advances rose 2% year-on-year in February, meaning those who can’t obtain loans resorted to using their credit cards.
Recently, Finance Minister Lim Guan Eng lamented that banks were not flexible when giving loans and that he had received complaints they were being very conservative. And given that many banks had reported record profits, he threatened to impose a wind- fall tax on them if they were not flexible in their lending.
While Lim may encourage banks to be more flexible, he can’t really force them to lend. Every bank has its own way of assessing risks and will evaluate a loan application thoroughly.
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