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I refer to the malaysiakini report Nazir calls for 'thorough review' of NEP and agree with Nazir that it is about time that a thorough review of the NEP and its implementation is done if we are to remain competitive for the country to move forward economically.

However, Nazir's request for judicial reforms to aid in quicker loan recovery - a phrase typically used by bankers oblivious to a debtor's financial uncertainties - is somewhat puzzling. How do you hasten the legal process for loan recovery if a company or individual has already gone bust or is in financial trouble and what purpose does it serve?

As it stands, current laws regarding loan recovery are heavily stacked in favour of the banks. Over and above that, financial institutions are privy to instruments such as CTOS (Credit Tip Off Service Sdn Bhd), CCRIS (Central Credit Reference Information System) or FIS (Financial Information System Sdn Bhd) which virtually assures them that anyone getting into a financial hitch is paralysed if further credit is required to turn around their businesses.

There have even been complaints that banks have been liberally using Garnishing Orders which are issued by courts simply on the basis of an affidavit by the creditor, without even a court appearance by the debtor. Salaries, rent owing to the debtor, contracts and bank accounts can be garnished without further reference to the debtor. Recent newspaper reports suggest that banks today don't even go to court for garnishing orders but have inserted in fine print that personal accounts would be frozen if credit card holders default on payments due.

Nazir, it appears, further needs to be reminded that the multitude of complaints from the public regarding phenomenal interest rates for credit cards, penalties imposed for lost ATM cards, repossession of equipment or auctioning of property if companies falter by banks using their mighty legal machines. This is one reason why many companies and firms are in limbo resulting in a stagnant economy. Our bankers are not creative nor do they 'go down to the field' to help out actively in businesses that are not doing too well. The big stick, vis a vis, the courts, is what many banks in Malaysia resort to once there is a default.

How on earth are we going to build anything if entrepreneurs are expected to face everything alone? Business entrepreneurs often have strong beliefs about a market opportunity and are willing to accept a high level of personal, professional or financial risk to pursue that opportunity. In the US, they are highly regarded in as critical components of its capitalistic society. Entrepreneurs in Malaysia are no different except that unlike America, Malaysians don't have the backing of banks.

Banks here rather place their lendings in stocks that sometimes prove worthless, in the property market which is highly speculative resulting in empty shoplots. Our bankers do not want to invest in businesses. It is very telling in the Malaysian setting. Incredibly banks today have never been more secure especially after the unfair monopoly afforded to them following their 'consolidation' after the 1997 crisis. The average borrower's choice has been greatly reduced.

If there is one industry that really needs competition in the Malaysian scene, it has to be the banking industry. The entrepreneur is the lifeblood of a vibrant economy - where can he go to secure a loan to open a business? Whether it is a boutique, mini-market, shoeshop, clinic, tailor shop, cobbler, car workshop has credit been easily forthcoming for anyone to start a business in this country?

Almost anyone will tell you that despite filling in umpteen forms and running up to the bank a zillion times the last C of credit character, counts for nothing as almost always the first 4Cs - capital, collateral (especially collateral), conditions and capacity will always take precedence.

Bankers are very important to society and if they firmly believe that their duty is to only lend without actually taking a keen interest in the business they lend to then, of course, the knee-jerk reaction would be to have even more stringent regulations against borrowers and the incessant call to wind-up companies and bankrupt individuals to recover whatever little that is left.

This is not how bankers can help build up a country. The proverbial umbrella cannot be removed during difficult times. SMIs and SMEs will be the lifeblood of this country in the foreseeable future as FDIs dry out and the quicker Nazir and his colleagues learn to nurture and work with them, the brighter the prospects for this country will be.

If Malaysia is to survive and prosper it is not judicial reform but serious banking reforms that are required.

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