IPOH, (Bernama) -- Bank Negara Malaysia's (BNM) new rules restricting personal and property loans to a maximum loan period, will not impede domestic growth, as it has a primary basis supported by various sectors.
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| Photo Credit:ohjob.info |
Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the country's economic growth was also dependent on consumption (spending) and private sector investment alongside government spending.
"The primary basis for domestic growth is already there. We want a banking sector of high quality, meaning liquidity in the sector, will not be impacted.
"Investors from the corporate sector and entrepreneurs will be able to obtain loans more easily. When we enhance the quality of spending by the people and the banking sector, it will also contribute to the country's growth," he told reporters here Sunday.
He had earlier officiated a programme on enhancing the use of libraries by the people under the 1Malaysia Library, Kampung Datuk Ahmad Said Tambahan 3, at Manjoi here.
Ahmad Husni said the new move by BNM, is expected to see a reduction in loans, but it will not impact overall spending and the private sector, as well as government spending which had its own overall basis.
"In the banking sector, while the loan policy is high, we see that in the context of the Minimum Payment System, it is very low. We want to move in the direction of higher affordability on the issue of homes," he added.
He said if there was low affordability, there are some who will borrow from institutions outside formal banking and this is not a good practice, leading to problems, and the government wants to strengthen the formal economic system as it is now.
Ahmad Husni said BNM's initiatives which are effective immediately, is also capable of changing the spending culture to one that is more positive.
He said it was worrying when BNM's study showed that as a result of easily securing personal loans and a long repayment period, the Malaysians involved were having a lower "take home pay".
"BNM hopes that personal loans will move in a more productive direction as there were many individuals borrowing for non-important matters. So, it is excessive spending that we want to avoid," he added.
Apart from high quality loans, BNM's initiative will also create Malaysians with a higher income in their lives, Ahmad Husni said.
"For the long term, we see that from the aspect of the level of salaries, and it is important we ensure that the targeted economic growth is achieved.
"This means when the targeted growth moves towards that of a high income nation with a high Gross National Income, it will enable income distribution to workers in the private and public sectors, and enhance that of the people," he added.
Ahmad Husni said the policy towards this was already available through the Economic Transformation Programme and was moving towards an achievable standard.
This is despite from this year until 2020 the global economic growth being very challenging in the face of a decline.
When asked if there would be any more new proposals to be tabled in the Budget 2014 following BNM's announcement on the new initiatives, he said what had been mooted was sufficient.
But he added that there would new initiatives to be undertaken such as that for the Bantuan Rakyat 1Malaysia (BR1M).
"We see no problems in enhancing the BR1M level. It is the basis for the government to review the subsidy rationalisation policy.
The government subsidy is very large and is enjoyed by all the people without considering the income levels.
"We are studying how to rationalise the subsidy and transfer the rationalisation to the target group through the BR1M," Ahmad Husni said.
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