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Ensure That All Bank Mergers Are Based On Sound Financial Considerations Statement by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on the comment by the Prime Minister that the Government will revise the number of anchor banking groups of six if necessary. 8 October 1999. | |||||||
| The World Trade Organization, WTO, is trying to liberalize trade including banking. The Government has been urging the 58 financial institutions to merge into six banking groups. We have been watching the development closely, hoping that all mergers will be based on purely financial considerations. If these mergers can truly srenghthen our banking system to compete with the best in the world, we believe that the people will accept them. On the other hand, the public are concerned about non-financial factors such as business politics and cronyism. There are 21 commercial banks, 12 merchant banks and 25 finance companies. The Federal Bank, Bank Negara, has given the deadline of 31 December 1999, for them to merge into six banking groups. The proposed groups are Malayan banking, Multi-Purpose | |
Bank, Bumiputra Commerce bank, Perwira Affin Bank, Public Bank and Southern Bank. The public have doubts. For example, Southern Bank is small and its management is not known to be so efficient. It has been proposed as an anchor bank. The Prime Minister Dato' Seri Dr Mahathir Mohamad said on 6 October 1999 that the Government would revise the number of anchor banking groups if the financial institutions concerned could make a strong case as to why the number was not suitable. It is not enough to revise the proposed number of banking groups. It is important to ensure that only financial considerations are made. There should not be any political or other factors such as business politics and cronyism. Indeed, there will be difficulties like solving non-performing loans.
Dr Tan Seng Giaw | |||||
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