BNM should be independent of partisan political influence, says NGO

AS part of the ongoing reforms a non-governmental organisation (NGO) said Bank Negara (BNM) should be made independent like central banks in countries which have reformed their economic superstructures to be independent of partisan political influence.

The Social Protection Contributors Advisory Association Malaysia (SPCAAM) in a statement said BNM must be outside of the interests of the commercial objectives of commercial financial institutions to ensure that it can objectively and independently promote monetary and financial stability.

"Prime Minister Datuk Seri Anwar Ibrahim is making great strides in reforming the governance architecture of the country, and this is in turn making Malaysia more attractive towards investments in various areas which will grow her economy. 

"As a regulator which should be exercising supervisory jurisdiction to ensure the safety and soundness of individual financial institutions and to monitor their impact on the financial system as a whole, BNM cannot be seen to be influenced by powerful financial institutions," said International Labour Advisor Callistus Antony D’Angelus.

He said BNM should report to Parliament directly and not to any executive authority such as the Ministry of Finance.

He said the upcoming budget will be an opportune time for the Prime Minister to put into motion steps which will make BNM independent from executive oversight and instead transfer such oversight to the legislature. 

"We can expect financial institutions in Malaysia to oppose this, as they have grown accustomed to having it their way. 

"There must be political will on the part of the Madani government to carry such a change through," he said.

Callistus said this is one measure in which every side of the political aisle in Parliament should come together on and where the interest of the rakyat should be made a priority. 

"Let us recognise that banks serve as custodians of public finance and should be accountable to the public.

"When we refer to reforms, it must be tangible and benefit the people of the country. It is time to move beyond rhetoric and tokenism to make structural reform matter in the real sense," he added. - October 13, 2024