Published on: Sunday, July 29, 2007 |
Kota Kinabalu: Lending to the household sector is expected to continue expanding in the country owing to rising income and consumption levels.
And to better prepare financial consumers in improving their money and management skills, Bank Negara assured it will continue to promote financial service providers' disclosure of information on their products and services.
This is besides promoting consumer understanding of financial products and services.
"This will enable financial consumers to make the right choices in selecting suitable financial products and services that meet their requirements and are within their financial capacities," said Bank Negara Kota Kinabalu Branch Manager, Ahmad Abdul Rahim.
Despite the concerted efforts on educating consumers in sound financial management, including prudent lending and borrowing practices, there will still be cases where financial consumers are affected by unexpected developments or events beyond their control, he added.
"This includes illness, loss of income and family emergencies as well as instances when they have over-stretched themselves financially and are unable to meet their obligations," he said at the opening of the joint Bank Negara-Financial Planning Association of Malaysia (FPAM) Financial Education Roadshow 2007, here, Saturday.
Ahmad said effective money management is an important living skill necessary for any adult financial consumer who needs to be in control of his finances.
This living skill is especially necessary for the head of a household or the person holding the purse strings of a family in view of the rising level of household indebtedness in the past few years as domestic demand in the Malaysian economy strengthened, and is supported by positive consumer sentiments and increased access to financing, notably in the area of consumer credits.
"With the greater expectation on consumers to take more responsibility in managing their finances, efforts will continue to be directed towards enhancing consumers' financial capability so that they have better ability to make meaningful choices appropriate to their needs," he said.
In this regard, he said Bank Negara has since 1997 embarked on a number of initiatives to inculcate smart financial management habits amongst vulnerable consumers such as students, single parents and young workers.
Bank Negara, in collaboration with the financial industry, also launched the consumer education programme (CEP) for the banking and insurance sectors in 2003 to increase consumers' access to information on products and services, including Islamic Banking and Takaful, and to broaden their awareness on their rights and responsibilities.
Ahmad said the information is disseminated to the public through a wide range of information booklets and in the BankingInfo and InsuranceInfo websites.
In addition, comparative tables are published on the BankingInfo website to inform consumers on the features and comparative costs of selected banking products such as credit card and hire purchase loans.
Bank Negara also facilitated the formation of the Financial Mediation Bureau (FMB) to ensure consumers have recourse to an independent and integrated dispute resolution centre for financial service providers mentioned earlier as well as payment system operators.
"The formation of this bureau provides consumers with a convenient and efficient avenue to seek legal redress as an alternative to resolution through the courts," he said.
Apart from this, Ahmad said Bank Negara has also established a customer service centre at its head office in Kuala Lumpur to provide information, advice and services called "Laman Informasi Nasihat dan Khidmat" or LINK, in short, to enhance consumers' access to information relating to Bank Negara's operations and policies, the financial services sector and financial education of consumers.
"LINK also provides support to Bank Negara's SME Special Unit in a number of areas associated with access to financing to the small and medium enterprises. This facility will be extended to all five Bank Negara branches nationwide in the near future," he said.
He said recently Bank Negara initiated the establishment of the Credit Management and Counselling Agency (AKPK) to proactively ensure the household sector continues to be resilient by providing an avenue for individual borrowers and potential borrowers to seek advice and assistance in managing their finances and debts.
And at the same time promote a sound and robust banking system, he added.
AKPK services include counselling and advice on financial management like financial budgeting to manage expenses; debt management programme to assist financial consumers to regain financial control and; financial education on the responsible use of credit and basic money management skills.
"Individual borrowers can seek AKPK's assistance in rescheduling or restructuring their housing loans, hire purchase loans, and personal loans from, or outstanding credit/charge card balances due to the financial service providers," he said.
These service providers include all commercial banks, Islamic banks, insurance companies, Takaful operators, development financial institutions (such as Bank Kerjasama Rakyat Malaysia Berhad, Bank Simpanan Nasional and Bank Pertanian Malaysia) and credit/charge card issuers regulated by Bank Negara.
AKPK will assist consumers to proactively manage their debt via out-of-court procedures based on agreed repayment plans between the creditors and debtors, said Ahmad.
"AKPK, however, will not assist in developing personalised debt repayment plans for those consumers who have referred their cases to the courts," he said.
In addition to these, Bank Negara has undertaken several initiatives to ensure there are adequate avenues for redress and assistance.
Ahmad said each financial service provider is required to set up a dedicated complaint unit to ensure all complaints are dealt with promptly and efficiently.
"As such, any individual having debt problems with a single financial service provider should liaise directly with its complaint unit and should only refer his/her case to AKPK when he/she fails to resolve his case with his financial service provider," he said.
As AKPK's services are provided free of charge, he said individuals seeking the assistance of AKPK are reminded not to pay fees or commission to any introducer, agent or any other person.
"Moving forward, the enhancement of the consumer education and protection framework will remain a priority both to promote a progressive financial sector and to foster public confidence in the financial system," he said.
Bank Negara is also mindful that the effectiveness of the framework involves achieving an appropriate balance between safety for consumers and innovation for financial service providers.
In this context, he said consumers are expected to take more responsibility in managing their finances by understanding their rights and obligations before entering into any financial transactions.
Equally important is for financial service providers to promote greater awareness and understanding of financial products and services amongst their customers, as well as to operate in a fair, equitable and transparent manner.
FPAM KK Chapter Chairman Kevin Ng, Perbadanan Insurans Deposit Malaysia (PDIM) General Manager (Communication & Public Affairs) S. Loganathan, Financial Mediation Bureau (FMB) Manager Nor Azizah Mohd Hassan and AKPK Credit Counsellor Christine Liza Santos were also present.
Meanwhile, Ng said Bank Negara's consistent support has been instrumental in the development of the financial planning industry in the country.
"We appreciate the continuous initiatives to ensure customers are provided with objective, independent and appropriate advice of the highest professional standards," he said.
Saturday's one-day event was part of the effort to bring such customer education and information programmes which mostly are concentrated in the Klang Valley to a broader spectrum, he said.
