The bankruptcy cases trend among individuals has been declining since 2016, including the period during which the Overnight Policy Rate (OPR) was raised in 2018, said Bank Negara Malaysia (BNM) Governor Tan Sri Nor Shamsiah Mohd Yunus.
She said the declining trend was based on the latest trend and information provided by banks and selected non-bank institutions (hire purchase service providers).
“The number of youths (individuals aged below 35) who are bankrupt also showed a similar decreasing trend, constituting 14 per cent of bankruptcy cases from January to May 2022 (2017-2019 average: 24.9 per cent),” she said in a statement today.
Nor Shamsiah said this in reply to the bankruptcy issue which has often been exaggerated as being synonymous with the financial situation which has gotten worse, and claim by the Malaysian Association of Borrowers and Consumers which recently associated the hike in OPR with the bankruptcy trend.
She said in 2018, a total of 5,283 bankruptcy cases were recorded, 3,948 cases were registered in 2019, 2020 totalled 2,844 cases, and 2021 saw 1,884 cases.
The declining trend was from seven domestic financial institutions which accounted for 71 per cent of loans in the banking system, she said.
She added that many procedures needed to be complied by the financial institutions or other creditors because to declare a person as bankrupt is not an easy task.
“A bankruptcy action is the last resort taken by the financial institutions, after all recovery efforts have been exhausted to get back the loans given to borrowers,” she said.
