M'sia to rate banks to boost service, competitiveness

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Malaysia will begin rating banks for their customer service in a bid to push them to improve standards and boost competitiveness, a report said today.

The Service Quality Index, to be introduced this year, would encourage more competitive pricing for financial products, central bank governor Zeti Akhtar Aziz told The Star newspaper.

It would also allow the country's 10 banking groups to identify areas of strength as well as weaknesses, she said.

"We would like to see improvements in the quality of service provided by banks. We are aiming to achieve world class service quality in the financial services industry," Zeti said.

Being on par

An earlier industry-wide benchmarking exercise had indicated improvements in certain areas with the narrowing of margins and improvements in productivity, she said.

But Zeti stressed more effort must be made to place domestic banks on a par with foreign banks.

The central bank will continue to hold periodic discussions with the banks to review their performance against the benchmarks and their ratings, she added.

Malaysia, which has resisted pressure to allow new players into its banking sector, is expected to liberalise the sector by 2007 and bankers have been told to upgrade their skills to stay competitive.

The central bank last year said it expected further banking consolidation to leave between six and eight banks from the current 10 in the country, but stressed the process would be market-driven. — AFP



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