Appoint independent firm to find cause of backup data loss, CIMB told

KUALA LUMPUR: Bank Negara Malaysia has directed CIMB Group Holdings Bhd to appoint an independent party to look into the cause of the loss of several magnetic tapes containing backup data recently.

The central bank’s governor Tan Sri Muhammad Ibrahim said the move was to detect if there was any defect in the process.

“It is also to find out if any of the regulatory requirements have been breached.”

The report should be up soon, he said at a media briefing on the third quarter gross domestic product (GDP) results yesterday.

Following the incident, CIMB has assured customers that its security and internal processes have been stepped up.

Muhammad announced that the central bank had closed 674 accounts of those involved in getrich-quick investment schemes and blacklisted 405 entities.

“So far, this has been an effective strategy (to deter) the use of the banking system for the illegal schemes.”

The onus is on financial institutions to report money scams and close the accounts.

Only financial institutions licensed by Bank Negara are allowed to provide financial services in Malaysia.

Muhammad also shared his concerns about the property market and the need to keep the stock levels in check.

Bank Negara has raised its concerns with banking institutions for more than a year about the stock of high-rise buildings, office space and malls.

“If we are not careful and there is an oversupply, that will impact other sectors as well, including loss of jobs as part of spillover effects from the construction industry,” he said.

As far as the banking sector was concerned, the exposure still remained at a prudent level, he added.

Malaysia has a record high of unsold residential properties of about 130,690 units for the first quarter this year, mainly for houses priced above RM250,000, while the vacancy rate for office space is expected to be at 32 per cent in 2021.

With about 140 malls entering the market in key states by 2021, he said this would exacerbate the oversupply and potentially becoming more severe than during the Asian financial crisis in 1997.

Bank Negara, in a report, said this was a source of concern as the property sector had links to more than 120 industries, collectively accounting for 10 per cent of GDP and employing 1.4 million Malaysians.

“Borrowers continued to have access to home financing, especially first-time home buyers.”

Housing loan approval rate stood above 70 per cent, while the rejection rate remained below a four-year average at 23.3 per cent, he said, adding that financing for speculative house purchases remained muted.

In the first nine months of this year, RM121.6 billion of new housing loans were approved by banks, benefiting close to 300,000 borrowers.

Of this, 60 per cent was channelled for the purchase of houses priced below RM500,000.

He said housing loans continued to grow at a sustained pace of 8.8 per cent this year from 11 per cent last year.

On outstanding loans, about 71 per cent were for the purchase of houses priced more than RM500,000 by first-time house buyers, he added.