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Bank Negara to form Corporate Debts Restructuring Committee

Posted on: March 26, 2009

Bernama – Thursday, March 26

KUALA LUMPUR, March 25 (Bernama) — Bank Negara Malaysia is putting in place a corporate debt restructuring committee to restructure corporate loans as a pre-emptive measure should the economic conditions deteriorate further. “So far, we don’t expect any such cases where corporates need help to restructure loans because most of them are in good financial position and not over-leveraged as compared with during the 1997/98 Asian financial crisis,” said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz.

“We want to be in a state of readiness to restructure corporate loans,” she said at a press conference after releasing the central bank’s annual report for 2008 here today. Pengurusan Danaharta Nasional Bhd, which was set up to avert a collapse of the banking system during the 1997/98 Asian financial crisis, handled 47 debt restructuring cases worth RM43.97 billion.

Zeti said total repayment by businesses in 2008 was higher by nine percent and the non-performing loan rate has been declining.

“These are very positive indicators. So, should there be corporates that face difficulties and we cannot rule out this because the financial environment may turn worse, we will be in a state of readiness with a mechanism in place,” she said.

However, Zeti said a new Danaharta was not needed as a set-up was already in place within the Deposit Insurance Agency.

She said the agency not only has pay-out functions but also the powers for resolution, similar to those of Danaharta.

Zeti also said that members for the new committee would be announced next month.

“We already got the chairman, that is the most important,” she said but declined name the chairman or specified the number of members.

However, Zeti said the committee members would be mostly from the private sector.

The committee will be operational by middle of May this year, she said. — BERNAMA


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