In order to ensure that consumers are protected and treated fairly, Bank Negara is working with a number of ministries to make the Consumer Credit Act law soon.
Governor Datuk Nor Shamsiah Mohd Yunus said the central bank has been working with a number of ministries, namely, the Domestic Trade and Consumer Affairs Ministry, the Housing and Local Government Ministry and the Entrepreneur Development Ministry to see the process through.
“Discussions are at the advanced stage, and we hope that it would be included in the legislative process next year,” she told StarBiz in her first exclusive interview since taking on the job as the country’s top banker last June.
The bank is an advocator of the enactment of the Consumer Credit Act and the Act will promote a healthy consumer credit market across the board, by providing consumers equal treatment and protection irrespective of who they borrow from, Nor Shamsiah said.The Act will supplement the central bank’s Responsible Financing guidelines which it has issued not only to banks but also to cooperatives through the Cooperative Commission.
“These guidelines are meant to protect consumers so that they do not face financial hardships by taking on an obligation that they cannot meet, whether from the traditional or shadow banking sector.
“We want them to be able to create value from the borrowings that they take on,” Nor Shamsiah said.
The impending enactment of the Act comes at a time when consumers are gaining access to more financing choices compared to the earlier years.
“Going forward, we understand that consumers will have more diversified sources of funding, beyond the traditional banking and cooperatives systems,” the central bank governor said.“Our principle is that the consumer should be protected and treated fairly, regardless of who is providing the lending – be it banks, cooperatives, money lenders or credit companies.”
She noted that while better legislation can help, there is a need to raise the level of financial literacy in Malaysia as well.
In line with this, Nor Shamsiah said the central bank would be introducing a National Strategy for Financial Literacy which is expected to be unveiled in July.
The implementation of this strategy will be driven by the Financial Education Network made up of Bank Negara, the Securities Commission, the Employees Provident Fund, Perbadanan Insurans Deposit Malaysia, the Education Ministry, Permodalan Nasional Bhd and Agensi Kaunseling dan Pengurusan Kredit.
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