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To: LPS5 who wrote (22)	5/21/2002 8:21:20 AM
From: LPS5	Read Replies (1) \| Respond to of 2534

Malaysian Lenders Say Central Bank Should Be Less Hands-on Kuala Lumpur, May 21 (Bloomberg) -- Malaysia's banks, forced to consolidate into 10 groups, say the country's central bank should adopt a less hands-on approach and allow the lenders more flexibility in doing business. Malaysia's banks must seek permission from Bank Negara before starting merger talks with other lenders and, until recently, were forced to seek central bank approval for salary packages offered to chief executives. Bank Negara can ``be less prescriptive,'' said Tan Teong Hean, chief executive director of Southern Bank Bhd. at the Malaysian Banking and Financial Services Summit in the capital Kuala Lumpur. This will allow ``more flexibility, less rigidity, and allow those who are ready to move forward at a faster clip.'' Malaysia ordered its banks to merge into 10 banking groups in December 2000 to shield them from future crises after the 1997-1998 Asian financial crisis left many companies unable to repay loans. During the crisis that started in 1997, Malaysia injected 7.6 billion ringgit ($2 billion) into 10 troubled lenders, including RHB Bank Bhd. and AMMB Holdings Bhd. It also bought 47 billion ringgit of bad loans from local banks and offshore lenders, 43 percent of their total non-performing loans. ``There is a stewardship role that regulators must play, we have seen it through the crisis, we see it now, with the framework established through the financial services masterplan,'' said Rozali Ali, executive director of Commerce Asset Holding Bhd. ``I believe the best regulators are those that are unseen.'' -------------------------------------------------------------------------------- © Copyright 2002, Bloomberg L.P. All Rights Reserved.