KUALA LUMPUR, April 24 (Bernama) -- Bank Negara Malaysia has no intention to review its new guidelines on responsible lending for the time being, Governor Tan Sri Dr Zeti Akhtar Aziz said today.
"Whatever needs to be resolved will be through bilateral discussion. Right now we have no intention," she said when commenting on reports that the guidelines would be reviewed.
Bank Negara''s recent lending guidelines, effective Jan 1, stipulates that loans would only be approved based on net income and not gross income as previously practiced.
The new guidelines was aimed at managing household debt in Malaysia at reasonable levels.
Many parties in the automotive industry were not happy with the guidelines and attributed the drop in vehicle sales to the implementation of the guidelines.
Zeti said it would not be right for some automotive players to blame the guidelines for the dip in vehicle sales. "I don''t think that would be correct...because our guidelines are to ensure that the borrowers are in a position to take on increased debt and this is important. "It would not be of any use if the borrower cannot pay the debt and the car is repossessed. We want those who have the capability to take on (debt)," she said.
As such, she said the guidelines ensured Malaysia''s household debt and the quality of debt remained positive. In addition, Zeti said the country''s non-performing loans were declining. She also said sales of vehicles had to be based on comparative advantage such as cost of effectiveness, model designs and innovation that the automotive companies had undertaken.
"All these will help them. And, also it is obvious that the Malaysian market at some point will become highly saturated. It is already saturated in terms of car ownership," she added. Zeti said it was important for automotive players to be highly competitive and export their vehicles overseas.
Source: Bernama, 24 April 2012