Bank Negara: Banks must be proactive and support borrowers in difficult times | Money


At the end of the second quarter of 2021, outstanding loans to the business and household segments increased by 1.3% and 5.3%, respectively, compared to the same period last year, said the vice – Governor of Bank Negara, Datuk Shaik Abdul Rasheed Abdul. Ghaffour. – Photo by Hari Anggara

KUALA LUMPUR, September 21 – The banking sector will need to be proactive and ensure that it continues to build the necessary capacity to support borrowers in need of assistance quickly and effectively, said the vice-governor of Bank Negara Malaysia (BNM), Datuk Shaik. Abdul Rasheed Abdul Ghaffour.

He said this includes extending new financing to support economic recovery as more companies are gradually allowed to resume operations.

“Since the structural reforms of the post-Asian financial crisis era, banks have been a source of stability and strength.

“This must continue, even as banks face the long-term effects of the pandemic, including the potential double whammy of falling income and higher defaults by individuals and businesses,” he said. he said in his closing speech at Malaysian Banking and 2021. Fund the virtual summit today.

Co-hosted by the KSI Strategic Institute for Asia-Pacific and the Kuala Lumpur Economic Club, the full-day event brought together senior bankers, technology experts and thought leaders to discuss post challenges. -pandemic facing banks and financial institutions in the new normal.

At the end of the second quarter of 2021, outstanding loans to businesses and households increased by 1.3% and 5.3% respectively compared to the same period last year, noted Abdul Rasheed.

He said banks should continue to strengthen their countercyclical role to support the economy by continuing to fund viable but struggling borrowers, while the BNM will continue to help the industry by providing support in various areas.

“The financial sector should seize this opportunity to contribute to the recovery process and the nation’s broader reform programs.

“The pandemic has highlighted and exacerbated some of the deep structural problems in the economy, especially in the labor market, where more vulnerable groups of workers have been affected,” said Abdul Rasheed.

As the economy enters the period of recovery, he believes policies should shift from preserving jobs to creating jobs, and that banks can help by providing finance and also by supporting in other ways.

In addition, he said banks should also focus on sustainability as part of efforts to promote economic recovery, in line with the global goal of achieving a balance between economic, social and environmental progress.

“Banks have a vital role to play in the transition to a greener economy. For example, inclusive circular economy solutions and business models are seen as an essential part of sustainable development and are still seen as a high risk business for financiers.

“This is an opportunity for the banking sector to work closely with relevant stakeholders, including policy makers, to develop new and innovative financial instruments that reduce the risks of investments in the circular economy while ensuring the putting in place the right incentives for better public-private partnerships, ”he said. .

Meanwhile, Abdul Rasheed said BNM is committed to fostering an enabling environment for data sharing in the financial sector, which will focus on developing common standards for high impact use cases and strengthening the framework. of digital data governance to ensure the protection and fair treatment of financial consumers.

Likewise, the banking sector should make the most of advances in the data ecosystem to advance financial inclusion, to enable consumers to make informed financial decisions and to develop innovative financial solutions that benefit the rakyat in his outfit.

“Encouraging progress has been made in the areas of developing alternative credit scoring models with a wider range of data sources and in providing access to real-time personal financial management data for consumers, for to name a few, ”he said.

These efforts, he added, are certainly notable and the banking sector must continue to make progress on this front.

Looking ahead, Abdul Rasheed said BNM will launch the financial sector master plan early next year, which will set the vision for the financial sector for 2022-2026. – Bernama

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