Johor DAP is in support of Sultan Ibrahim Sultan Iskandar's proposal to set up a Bank of Johor.

However state DAP chief Liew Chin Tong and Johor opposition leader Gan Peck Cheng appeared to disagree with the Johor ruler on certain aspects on how the bank should function.

Sultan Ibrahim had on Thursday proposed that the Johor state government set up a state bank, that would provide housing loans, lamenting that many in the state are unable to borrow to buy homes.

He also proposed that the bank finance development projects and cater for savings and investments.

Liew and Gan however advised that a state bank avoid real estate and property loans as they are not a "productive sector."

"Secondly, when an application for housing loan is rejected, often it is because the applicant does not have sufficient income.

"Giving a loan to them will mean plunging them to perpetual financial misery. It may be a form of predatory lending," Liew and Gan said in a joint statement today.

Instead the duo said the bank should focus its efforts on helping small and medium industries and agriculture sectors.

This they said, could help the state achieve a "high wage, high skill and technology and high productivity virtuous cycle."

"If there is massive transformation in industries and agriculture sectors that pay Johorean workers much better, then they naturally qualify to borrow for property purchases from commercial banks," they added.

Liew and Gan also proposed that to enable more Johoreans to own houses, the federal and state government's should build more rent-to-buy properties to cater for low and middle income groups.