Why are credit and leasing companies not under Bank Negara Malaysia regulation?

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Credit and Leasing Companies Not Regulated by Bank Negara Malaysia

Credit and leasing companies are not currently regulated by Bank Negara Malaysia (BNM). This situation has led to concerns, particularly within the tourism sector, regarding the adherence of these companies to national financial guidelines, such as loan moratoriums. The Malaysian Association of Tour and Travel Agents (Matta) has highlighted that approximately 10,000 bus operators owe around RM3 billion to these entities, facing difficulties in making repayments despite a lack of business since March.
Lack of Regulatory Oversight

The absence of Bank Negara Malaysia's regulation over credit and leasing companies means these institutions operate outside the direct purview of the central bank's established financial frameworks. This has allowed them to implement their own rules and practices concerning loan repayments, rather than aligning with directives issued by BNM, such as those related to moratoriums during the Covid-19 pandemic.
Calls for Regulatory Action

Matta has formally requested government intervention to ensure that credit and leasing companies act in a manner compatible with the nation's welfare and public interest during the pandemic. The association specifically urged the government to consider regulating these companies under the Financial Services Act or other pertinent legislation. This plea stems from repeated complaints from members since March 2020 regarding inconsistent moratorium practices.
Impact on Tourism Industry

The lack of regulatory oversight for credit and leasing companies, especially concerning loan moratoriums, has exacerbated the difficulties faced by the tourism industry. Matta believes this issue has contributed significantly to the sector's ongoing struggles and could potentially hinder the planned restart of tourism activities in 2021. The association has expressed concern that a failure to address these concerns might lead to the perception that the government does not prioritize the industry's recovery.

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Why are credit and leasing companies not under Bank Negara Malaysia regulation?

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