BNM To Unveil New Regulatory Measures To Strengthen Banking System, Says Governor

BNM To Unveil New Regulatory Measures To Strengthen Banking System, Says Governor

KUALA LUMPUR, May 25 (Bernama) — Bank Negara Malaysia (BNM) will introduce three regulatory measures to strengthen the foundations for a strong and resilient banking system in the next seven months which include employment reference check.

Governor Datuk Seri Muhammad Ibrahim said the central bank would implement a mandatory employment reference check for financial industry employees which was aimed at removing employee information asymmetries during job transitions.

“We will share with the industry proposed revisions to the outsourcing policy to improve the governance and supervision of financial institutions, especially involving cross-border arrangements,” he said.

Speaking at the Asian Strategy and Leadership Institute’s 21st Malaysian Banking Summit, here today, he said the revisions also aimed to better support the development of domestic expertise and capacity in core functions of the banking industry.

Muhammad said a shared security operations centre for the financial industry (FINSOC) will also be established in coordination with the industry to support the continuous and proactive monitoring of cyber threats.

“Finally, by 2018, we hope to operationalise an industry-wide implementation of e-KYC (Know Your Customer) for the on-boarding of customers,” he said.

In another development, he said the banking sector, which has been a central pillar of strength for the Malaysian economy, could play a more positive role by engaging positively in conversations on economic and financial issues confronting the country.

He said narratives on the economy and industry continued to be shaped by external parties, drowning out the occasional whispers from the banking industry.

“Bankers have the equivalent of a box seat to provide an informed view on developments in the economy and financial system. Rather than being onlookers, the banking industry should weigh in on domestic economic discourse,” he said.

Muhammad said the bankers’ perspectives from sectoral issues to macro trends would provide additional viewpoints and enrich assessments by the public and financial community, and help address gaps between reality and perception that have too often dominated the public conversation.

“It is therefore timely for our bankers to participate more actively in the economic discourse to shape a more balanced narrative,” he said.

He said bankers should be proactively offering solutions to some of the pressing economic and financial issues facing the country, as a positive voice for socioeconomic change could help instil greater public trust in the role of the banking sector in nation building.

Muhammad pointed out that a current issue that had disproportionately drawn attention to banks was the affordable housing issue and the sizeable surplus in commercial property.

“We should explore ways to moderate the lending bias towards real estate,” he said, adding that banks should be providing more financing to new productive investments that were essential to support economic transformation with more innovative product offerings to meet the demands of the new economy.