Financial Institutions Urged To Curb Excessive Personal Lending
By Izam Said Ya'akub

Bandar Seri Begawan - Financial institutions have, been urged to heed the directives of the Ministry of Finance to reduce excessive personal lending and initiate a paradigm shift towards saving and investment instead.

"The government is wary that over reliance on (personal loans) is not healthy for the management of the country's financial system. This will prove unsustainable when society is being over burdened by non-productive debts beyond its means to service," said Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abd Rahman Hj Ibrahim, the Second Minister of Finance, at the 50th Anniversary Celebrations of Standard Chartered Bank at the Jerudong Park Polo Club.

Pehin Dato Hj Abd Rahman called on all financial institutions to lessen excessive personal lending and encourage a shift towards corporate lending and investment banking, wealth management and other fee-based activities.

The minister hoped that the response will not simply be to the letter, but also "in spirit" by all the financial institutions in the country.

In line with this, the minister also stressed that the concepts of financial planning be made more familiar, with the need for banks to advise their customers on more productive choices for their financial resources, and motivate them to save and invest for the future and for retirement.

Despite placing this emphasis almost two years ago, the minister highlighted the 'subprime' mortgage crisis and credit crunch as reason enough for Brunei to learn the lessons from economies that are affected by it.

"Such is a clear and high profile example of, the costs of excessive and poorly managed debt situations. His Majesty's Government will re-emphasise the need for strong financial regulation and risk management to keep financial institutions in this, country robust and resilient," he said.

Meanwhile, the minister cited StanChart's contribution to Brunei and in particular its exemplary efforts in the field of corporate social responsibility.

"Standard Chartered is a good example of corporate citizenship," he said, adding that other institutions should look towards following their lead. Reflecting on Standard Chartered and Brunei's contribution, "it is one that will put Brunei onto the environmental map," the minister said.

The sentiment was echoed by the visiting bank's regional chief executive officer of Southeast Asia, Ray Ferguson.

"I am intensely proud that our people in Brunei worked with the community and the World Wildlife Fund to win $500,000 in Standard Chartered's global Race for a Living Planet initiative that will be used to help fund the worthy Heart of Borneo initiative."

For Ferguson, the 82,000 who made contributions and pledges say a lot about the communities in Brunei despite its small population.

Brunei managed to edge out Taiwan and Hong Kong in the initiative. -- Courtesy of The Brunei Times

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