Bankruptcy on a downtrend since 2016 – Bank Negara

Bank Negara Governor Tan Sri Nor Shamsiah binti Mohd Yunus

KUALA LUMPUR, July 15 – Any action taken towards bankruptcy declaration by a financial institution will be absolutely the last resort taken towards an individual or business, Bank Negara Malaysia said today.

Responding to several statements linking both the rise in the Overnight Policy Rate (OPR) and the declining economy to cases of bankruptcy, Bank Negara Governor Tan Sri Nor Shamsiah binti Mohd Yunus in a letter to editors today, said in reality the trend in bankruptcy has been on a decline since 2016.

Recently the Malaysian Association of Borrowers and Consumers Solution (4PM) had suggested a parallel between a rise in bankruptcy trend and a higher OPR.

In reality this is not the case, said Nor Shamsiah, citing the latest information from banks and non banking institutions (providers of higher purchase services) that pointed at a declining number of bankruptcies among individuals since 2016.

This also covered the period in 2018 when the OPR rose.

The number of individuals below the age of 35 who went bankrupt also eased, accounting for 14 percent of the total number of cases from the period January to May this year compared with an average of 24.9 percent from the period 2017 to 2019.