Author: Wong Sing Nang
Date: 10-12-1999 03:24
MEDIA STATEMENT
BANKS MERGER (4): Welcome BNM decision to review
the banks merger (12-10-1999)
________________________________________________________
1. DAP Sarawak welcomes the decision taken by the Bank Negara
Malaysia (BNM) yesterday to review the banks merger. Apparently the
BNM took the decision to review the banks merger in response to the statement
made by Prime Minister Dr. Mahathir Mohamad that the banks merger should
be done with flexibility hinting that the number of anchor banks may be
increased or reviewed.
2. The ¡°highhanded¡± banks merger have aroused
great public interest and attention. The Bank Employee Union has voiced
their concern about the merger particularly the large retrenchment their
union members might have to face.
3. In Malaysia, the BNM alleged that with 71 banking institutions
prevailing in the country today, there are 2,712 branches located all
over the country, there is clearly that our country is overbanked and some
resources are wasted due to duplication of branches in the same locality.
4. Compared with the developed countries like Singapore, Australia,
USA, UK and Canada, certainly our country is over overbanked. In terms
of population and bank ratio, Malaysia is not overbanked. From developing
countries point of view, the present number of banks should be retained.
What we need to do is to have tighter control over the whole lending and
basic loan security system in order to strengthen our banking and financial
institutions.
5. In term of the number of banks to population ratio, Malaysians
have only 1.36 Bank Branch per 10,000 people, while Australians have
18, New Zealand 3.6, Canada 3.3, UK 2.7 and USA 1.96. We have about the
same as Singapore as Singapore only has 3.2 m population with 450 bank
branches, BR/POP ratio is 7555. But Singapore is a developed country with
100% urban population. The following figures reflect Malaysia is not overbanked.
Country Population No. of bank BR/POP ratio
(million) Branches
Malaysia 20 2712 7374
Singapore 3.2 450 7555
Australia 18 6840 2631
New Zealand 3.6 1404 2564
USA 200 52941 5100
UK 58 15675 3700
Canada 30 9900 3030
6. The argument that Malaysia is overbanked, often used to justify
the merger process also does not hold water given that historic profitability
data indicates that the current banking system is well matched to the country¡¯s
credit allocation needs.
7. Any closure of bank and finance company branches have
negative impact to the local community in terms of accessibility to
banking services.
8. Each and every local branch provides essential services to the
community especially in Malaysia where a large population still living
in the rural areas.
WONG SING NAN
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