Banking (Commercial Banks)

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At the end of 1996, there were 37 commercial banks, 14 of which are foreign-owned. They operate a total of 1,569 banking offices located throughout the country and maintain trading and financial connections with the major money centers of the world. Total deposits with commercial banks amounted to RM243.9 billion at the end of 1996.

Total resources of commercial banks, which included capital and reserves, deposits, borrowings from other financial institutions, bankers acceptances (Bas) an other liabilities such as interest-insuspense, provision for bad and doubtful debts and borrowings from and bills discounted with BNM, contracted by 6.4% or RM31.0 billion during the first seven months of 1998, compared with an increase of 17.1% or RM61.6 billion during the corresponding period of 1997. The decrease in total resources was mainly due to the decline in deposits and interbank placements. New deposits, including NIDs, New Investment Fund (NIF), special deposits and repos mobilised by the commercial banks contracted by 2.6% or RM7, 672.1 million during the first seven months of 1998 (January-July 1997: increase of 9.8%) as a result of the contraction of the real economy as well as decline in disposable incomes (January-July 1997: increase of 9.8%). Deposits placed with the commercial banks accounted for 69.3% of the total deposits placed with the banking system.

COMMERCIAL BANKS: DIRECTION OF LENDING