DAP calls for an independent study of Bank Negara’s forced bank merger proposal as to whether a clash of cultures, systems and agendas will cause more harm than good in the long run to the financial industry as well as investor confidence


Media Statement
by Lim Kit Siang 
 

(Petaling Jaya, Friday): There have been an increase of negative reactions and outright opposition to Bank Negara’s  forced bank merger proposal, wanting to consolidate 21 commercial banks, 25 finance companies and 12 merchant banks into six large banking groups, with preliminary merger agreements signed by all financial groups by the end of September.

The latest negative response is from the National Union of Bank Employees (NUBE) which has expressed its opposition to Bank Negara’s forced bank merger plan.

The NUBE fears that as many as 15,000 workers out of the 75,000 employees in the banking  sector  may lose their jobs once the 21 banks, 25 finance companies and 12 merchant banks are merged into six core banking groups.

The NUBE, which complained that there was no consultation with the banking industry unions over the forced merger plan, has rightly pointed out that  forcing 58 banks, finance companies and merchant banks to become six would mean numerous cultures and systems made into one.

What is worrisome, however, is not just a clash of different cultures and systems but also of different agendas which will cause more harm than good in the long run for the financial industry and  investor confidence.

Although Bank Negara has stated that its move to consolidate the banking industry was not politically motivated,  there is still a lot of convincing to be done by the central bank.  Would  the mergers result in the concentration of the banking business under the ownership of a few closely linked to the present powers-that-be while banking groups that have been closely identified with the former Deputy Prime Minister and Finance Minister, Datuk Seri Anwar Ibrahim, would be gobbled up - even producing the outrageous spectacle of weak or  "ailing" banks taking over  strong and "healthy" ones?
 
For this reason, DAP calls for an  independent study of Bank Negara’s forced bank merger proposal as to whether a clash of cultures, systems and agendas will cause more harm than good in the long run to the financial industry as well as investor confidence.

(20/8/99)


*Lim Kit Siang - Malaysian Parliamentary Opposition Leader, Democratic Action Party Secretary-General & Member of Parliament for Tanjong