The banking system in Malaysia has remained relatively resilient amidst the regional financial turbulence. During this period, the financial sector has been affected by these developments. As part of its on-going efforts to strengthen the banking system, Bank Negara Malaysia (BNM) has today assumed control of MBf Finance Berhad (MBf Finance), a finance company licensed under the Banking and Financial Institutions Act 1989.

MBf Finance is a solvent concern. However, MBf Finance requires recapitalisation to improve its financial health and to restore its risk weighted capital ratio to 8%. The assumption of control by BNM is a pre-emptive action to putting MBf Finance on a stronger financial position as it would enable BNM to restore MBf Finance to a healthy position as well as strengthen its Board and management so as to ensure MBf Finance’s viability as a going concern.

Towards this end, BNM has appointed Encik Low Ngiap Jin as the Chief Executive Officer of MBf Finance. He will be responsible for the day-to-day operation and management of MBf Finance with effect from 4 January 1999. Encik Low is an experienced banker, having spent 37 years of his career in the banking industry. He was with BNM for 25 years in Banking Supervision and Internal Audit Departments. After leaving BNM, he joined other banking institutions at senior levels. His last position was as Senior General Manager of the Credit Division of Public Bank Berhad until his retirement in 1996.

The business activities of MBf Finance will continue as normal, including deposit and lending activities. Depositors should note that all deposits of licensed banking institutions are guaranteed by the Government, and therefore the Government will meet all deposit obligations (principal as well as interest payments) of licensed finance companies, and this includes MBf Finance.

Clarifications on matters relating to the above should be directed to the Bank Regulation Department, Bank Negara Malaysia at direct line 03-2913225 and general line 2988044 extensions 8139 and 8140.