Warning To The Reckless FinTech / Digital Microloan Gurus! – Part 1

The Trio!. From left: The famous Datuk Syed Zaid Albar from SC. Center: YB Tengku Zafrul, the famous singer “Hebatnya Ku” cum unelected Senator. Right: Tan Sri Nor Shamsiah Bte Mohd Yunus, Governor of Bank Negara Malaysia (Malaysian Central Bank)

Origin of Fintech

FinTech started by WeChatPay and followed by AliPay in China many years ago.  Both are eWallets where customers have to deposit money into their account or their credit card or direct debit card are linked to it.  There was no cause for alarm. 

A year or two ago,  eWallets were introduced by GrabPay and Touch n Go in Malaysia, there were no problems as most if not all customers spent within their means. It operated like the internationally known PayPal where the account is linked to the bank account or credit card.

Digital Microloans

The emergence of Digital Microloan that is of concern to the nation!

We all support the government to make life easier for the Rakyat especially the B40s so that they will be easily accessible for loans through financial schemes such Digital Microloans to help them.  However, at this juncture there are no laws in place to govern Digital Microloans to protect the vulnerable B40s of which consist mainly of students and low income households.

It must be noted that out of a sudden in January 2021 the Governor of Bank Negara Malaysia (BNM) (Malaysia Central Bank), Tan Sri Nor Shamsiah Bte Mohd Yunus, had announced that BNM had opened invitations for companies to apply for Digital Banking Licence from January 2021 and closing date was 30 June 2021.  This Digital Banking Licence issue went quiet until early this year.  Suddenly BNM had said that it will award this licence to the “SELECTED FIVE” companies.  Presumably the licence is to cover the public offer of Digital Microloans!   

On 30 March 2022 BNM Governor announced that “upon completion of the legal process” BNM will only announce BNM’s decision which are the “SELECTED FIVE” companies have been awarded with the said licence, HERE.

No Law To Govern Digital Microloans

It was on 30 March 2022, BNM had uploaded its Annual Report online, wherein it had admitted that it has just started to discuss with the Security Commission (SC) and Ministry of Finance (MoF) to come with up with a new Consumer Credit legislation.  Whilst they are discussing about the said new legislation, several Digital Microloan companies have already launched their products as though they had already obtained the Digital Banking Licence from BNM and received “green light” to do so.  Perhaps someone higher up had whispered to the “friendly” parties that BNM had already granted the said licence to their respective companies!  It is a case of “Malaysia Boleh” system!   

It seems that the Digital Microloan companies have already been allowed to dish out loans two to three times the B40’s monthly salary.   

The Unelected Minister of Finance, Tengku Zafrul Was Encouraging Members Of The Public: Don’t ask. GOpinjam.” Most Irresponsible!

(From left) Alan Ni, CEO of Touch ‘n Go eWallet,Effendy Shahul Hamid, Group CEO of Touch ‘n Go Group, the unelected YB Senator Datuk Seri Utama Zafrul Tengku Abdul Aziz, Minister of Finance Malaysia, Datuk Mohd Nasir Ahmad, Chairman of CIMB Group and Dato’ Abdul Rahman Ahmad, Group CEO of CIMB Group posing for a group photo after the launch of A Break Through Consumer Financing Product. —SAMUEL ONG/The Star

It is scary!  At this rate, perhaps “nasi sudah menjadi bubur” by the time our most proactive unelected Finance Minister, Senator Tengku Zafrul, is ready to read this Consumer Credit Bill in Parliament for approval!   

BNM, SC and the unelected Senator are taking this Digital Microloan very lightly!  Our nation is doomed for disaster in a matter of a few years and when the Digital Microloan bubble burst then we will witness many B40s will be in misery. Digital Microloan operators and bank will also go bust!  To take whatever remedy actions then will be futile as it will be a case of “closing the stable door after the horse has bolted”!  

It seems that under the watch of the best unelected Zafrul, Malaysians are suddenly being encouraged to participate in the Digital Microloans under the pretext of helping B40s. The latest motto of Zafrul was: “Don’t ask any question. Just borrow”!  It would appear that this unelected minister has been on a launching and promotion spree of the Digital Microloans for companies without putting the relevant laws in place to protect the Rakyat from being exploited.  This was most irresponsible to say the least. Then what do you expect from an IRRESPONSIBLE “Tongkat Assisted” Minister!  

Mushrooming of Fintech / Digital Microloan Products

Out of the blue, we saw the mushrooming of FinTech asuch “Buy Now Pay Later Schemes” (BNPL), eWallets, Digital Microloans and the like in Malaysia.  

BNM must be forewarned that such FinTech / Digital Microloans is very attractive to the majority of the ordinary Rakyat namely the B40s group.  Such schemes are easily accessible to B40s whereas normal loans are usually out of reach for them in the conventional financial institutions due to stringent rules and procedures.  

The operators of FinTech / Digital Microloan are in fact identical to banks in a smaller scale but without strict laws to control them at this moment.  In short, FinTech / Microloan operators more concern with volume of borrowers and 100% profit driven. Of course, that is to say to help the rakyat! This is a dangerous trend!  It seems that our most ambitious unelected Finance Minister is walking a fine line between ingenuity and impulse here but with his so-called brilliance, it is assured that Malaysia will be doomed with disasters in a few years’ time if this situation is allowed to go without the consumer credit legislation in place.  

To be continued.

Next Change for Part 2 – Stay Tuned!

“Budak Tingkat 4” Arę Running Amok!

Yours truly’s speech in Parliament

Updated on 23.4.2022.

Just as we thought that both Tan Sri Nor Yakcop, the then Minister in the Prime Minister Department, and Tan Sri Zarinah Anwar, the then Security Commission Chairman, had disappeared from the scene so were the “Budak Tingkat 4”, it is now transpired that there are many “Budak Tingkat 4” aka “4th Floor Boys” are back running amok in the GLCs, Security Commission, BANK NEGARA MALAYSIA and etc. It seems that there is one Tingkat 4 connected to the Minister too.

There is an unseen hand in putting in place the “Budak Tingkat 4” in the GLCs, government agencies and a Minister. This unseen hand, who had retired from politics for some years, is still very powerful and very much in play these days. He is still powerful to put in place the Budak Tingkat 4 in GLCs and several appointment in government. This retired politician is a household name in Malaysian politics 20 years. Rumour has it that he is still holding court several times a month with the Budak Tingkat 4 in an eatery in Damanasara Kim. May be planning all the appointments and doing deals!

It is an open secret that the “Budak Tingkat 4” were running very high and were then roaming the corridor of power with impunity! At that material time, even God feared them! “Tahu sama Tahu” who are the “Budak Tingkat 4” and they know it themselves.

The Famous Tan Sri Azman Mokhtar & Tan Sri Azman Yahya, The Governance Guru In BNM

Picture above: Tan Sri Azman Mokhtar and Rashdan (aka Danny) was the founder of BinaFikir Sdn Bhd, a consulting firm, which was incorporated in January 2002. Soon after it was incorporated, BinaFikir was appointed by MAS / Khazanah to restructure MAS. At that material time Tan Sri Noor Mohamed Yaakop was the then super powerful Minister of Finance 2. After the appointment of BinaFikir, in 2002 Azman / Rashdan aka Danny (co founder of BinaFikir) coined the term ”WAU” (Widespread Assets Un-Bundling). Under WAU, MAS was on a sale of strategic assets spree under the pretext of generating fund for MAS! Read HERE for details.

Thereafter in 2004, TS Azman Mokhtar was appointed as MD of Khazanah Holdings, HERE. Presumably TS Noor Yaakop was instrumental in the appointment. He held on to the post in Khazanah for far too long (2004 – 2018 – 14 years). During his reign in Khazanah there was embroiled numerous controversies.

Out of the blue, in December 2021, Azman Mokhtar has been appointed Chairman of Tabung Haji, read in HERE. Of course, there is no other more qualified person than Azman Mokhtar!!

Azman and Rashdan became the hero of the industry during the reign of Tingkat 4 / Badawi Adminjistraion.

In March 2020 TS Azman Yahya (in the above picture next the TS Azman Mokhtar) was appointed as a board member of BANK NEGARA. He was also handpicked to be the Chairman of Board of Governance in Bank Negara, a powerful position. During the Noor Yaakop and Azman Mokhtar days in Khazanah, Azman Yahya the Governance Guru was appointed to head Danaharta, which was embroiled with controversies too. Azman Yahya’s long list of appointments in government agencies and public listed companies are listed Bloomberg report in HERE. Presumably all these companies must be performing very well!

Perhaps the prerequisite of a person to be appointed to high position in BNM or other government agencies that oversee evaluation and approval for licences for licences or permits in BNM or government agencies, is one must be embroiled in controversies or some form of scandals!!

During the height of the scandalous MAS-AirAsia Share Swap (SUAP), which was the brainchild of Azman Mokhtar of Khazanah and another financial genius Nazir Razak (ex-CEO of CIMB Bank and now head of Bank Pembangunan and Danajamin), the said “GOVERNANCE GURU” Azman Yahya was appointed as a board member of MAS, HERE & HERE. Of course, the Governance Guru has no clue about aviation industry except to do … . Tau sama tau la!

The said WAU and the MAS-AirAsia Share SUAP were totally failed projects as there were hatched in a wanton manner by several Budak Tingkat or its group with certain agendas, which are best known to them. It was a case, “Bina tak Fikir” Project!

Azman Yahya is a famous man whose name surfaced every where – even in a private property disputes between Kamaluddin Abdullah and Naza. Please read in HERE.

The Woman of The World, Datuk Rohana Rozhan, the Tim Leissner’s Playmate!

It was at the same time as Azman Yahya that famous and powerful Datuk Rohana Rozhan, ex CEO of ASTRO, was also appointed to the board of MAS. It was revealed in New York Court by Tim Leissner of Goldman Sach that he was then having “Fun” with Rohana for many years and she had blackmailed him to buy her a house worth £10 million in London in exchange for not exposing him of his involvement in the 1MDB scandals, HERE. This was the professional standard of an editor of a news agency then. Lets hope that now most if not all the editors of newspapers and news portal are professional.

These “Budak Tingkat 4” and/or their cronies are very powerful and influential who were and are holding high positions in the country administration including Bank Negara Malaysia.

BANK NEGARA, The Nation Central Bank

We can only hope that the Governor of our Central Bank (Bank Negara Malaysia), Tan Sri Nor Shamsiah, will put protecting the image, integrity of BANK NEGARA and more importantly PUBLIC INTERESTS well above the desires of someone in the evaluation of which 5 companies of the 29 are really qualified to be awarded with the Digital Banking Licence and/or Buy Now Pay Later Scheme (BNPL). For the background of Digital Banking Licence please read in HERE.

It must be noted that if Digital Banking Licence /BNPL are in the wrong hand, it can only spell disaster for the financial market in Malaysia and bring untold miseries to the Rakyat!

As we all know that currently there are no rules or laws to regulate the operations of Fintech, Digital Banking Licence and/or BNPL. BANK NEGARA in a statement last week had admitted that BNM, SC and Ministry of Finance are NOW ONLY discussing about putting in place a new law called Consumer Credit Act to regulate the operations of Digital Banking Licensee and/or BNP, HERE. Can you all imagine this is happening in Malaysia! It is a case of “Closing the stable door after the horse has bolted”!

As it were there are many Rakyat have voiced out their concerns with easy approval to get loans many folds above the applicants’ salary for the BNPL Scheme. It seems it is getting out of control! Don’t tell us that BANK NEGARA Governor and her Tingkat 4 officers are oblivious to all the postings in Socmed!

Image and Integrity of BNM and Protecting Public Interests are of Utmost Importance

For the sake of our beloved Malaysia and the Rakya, we trust that the Governor Tan Sri Nor Shamsiah will strictly adhere to the stringent procedures and rules that have been put in place in BANK NEGARA and that she will not be pushed around to do someone bidding in the approval of Digital Banking Licence and/or BNPL licence or permit.

We also trust that BNM under the watch of Tan Sri Nor Shamsiah will not reduce itself to that of Security Commission under the watch of shameless Datuk Syed Zaid Albar, HERE. Don’t be one of the many “BINA tak FIKIR” gang!

We can only hope that Governor of BNM and others in BNM will be mindful of the unseen hand and the manipulations of “Budak Tingkat 4” and gang. Please be mindful that the Rakyat are watching closely in what BNM is or will be doing on the Digital Banking Licence and/or BNPL.

Stay Tuned.

BANK NEGARA: Now Every PN17’s Related Companies Can Apply For Digital Banking Licence!

Left: The Best Minister of Finance of all time, Senator Tengku Zafrul. Right: Bank Negara Governor, Yg Bhg Tan Sri Nor Shamsiah Binti Mohd Yusuf, Governor of Bank Negara Malaysia.

Update on 30.3.2022 @ 5:15 pm: At last Bank Negara Malaysia has woken up about the problems that will arise from “Buy Now Pay Later Scheme” (BNPL). It is only now that BNM, SC and MOF are looking into passing new laws to regulate BNPL Scheme. What a joke! It is a case of “closing the stable door after the horse has bolted’. As usual it is better late than never. Thank you BNM for a job well done! See in HERE.

With the advent of various innovations in the financial world, in January 2021 our most competent Minister of Finance, Senator Tengku Zafrul, and/or Bank Negara Malaysia (“BNM”) Governor, Yg Bhg Tan Sri Nor Shamsiah Bini Mohd Yunus, have sought to enter the arena of financial technology by opening up applications for five (5) Digital Banking Licenses in. On 30.6.2021, applications for the so-called digital banking licenses had closed and it has been reported that there were twenty-nine (29) applicants as stated in HERE

On 1.7.2021, BigPay Malaysia Sdn Bhd (“BigPay”), an outfit of PN17 AirAsia had applied in lightning speed to BNM for a Digital Banking License as reported, HERE.  Other contenders for the coveted five (5) digital banking licenses include GrabFin, Sunway Group, AEON Credit, Kenanga Bank, Axiata, RHB Bank Berhad and etc. 

On 11.2.2022, The Star had reported BNM Governor YBhg Tan Sri Nor Shamsiah Mohd Yunus had announced that the results of the applications will be announced in March 2022, HERE.

On 3.3.2022, Malaysian Reserve reported that Tan Sri Tony Fernandes, the top executive of AirAsia group of companies which include BigPay Sdn Bhd and BigPay Later Sdn Bhd launched a brand new digital personal loan facilities and that it will be regulated by the Ministry of Housing and Local Government. This is very confusing and its not clear whether this is part of the Digital Banking or not, HERE.

During the said launch, Tan Sri Tony Fernandes had jokingly said: “I know we still owe people money through refunds, but now you can get loans from us.”

I’m sure all of you will find this very funny! It must be noted that many AirAsia customers have not been refunded what they have paid to AirAsia for flight tickets which flights were cancelled not due to the fault of the customers.

Rumour: BigPay May Be One of the Five

Rumour has it that BigPay may be one of the selected five (5) applicants but until this very day, the famous Tengku Zafrul and/or the BNM Governor have not uttered a word about the successful applicants. Lets wait and see as March is coming to an end soon!

Let us not forget that the apex authorities for all financial activities in Malaysia, namely BNM and the Minister of Finance are responsible to ensure that members of the public are adequately protected from the possible negative impacts of these so-called new innovations proposed by the smart alecs! 

Buy Now Pay Later Scheme

Although no proper announcement had been made by both Tengku Zafrul, the Minister of Finance and a good friend of Tan Sri Tony Fernandes and former CEO of Tune Money Sdn Bhd, an outfit of AirAsia Group, and BNM Governor, BigPay had started to offer a variety of financial technology products including microloans known as “Buy Now Pay Later (BNPL)” scheme, and also the so-called “instant digital loan” in Malaysia wherein borrowers can obtain instant personal loans within minutes HERE.

What an innovation! Such products are undoubtedly extremely attractive for low-income groups such as students, B40 and others who may normally face difficulties in obtaining a bank loan due to their financial track record. This BNPL scheme and instant digital loan will encourage the said low-income group to “SPEND NOW and THINK ABOUT THE REPAYMENT LATER.

Yours truly opines that this is a dangerous trend which might result in B40 especially students to start their lives with debts which they will not be able to repay or they will be burdened with debts. 

It is strange that BNM Governor is going to make her grand announcement of the five (5) successful applicants for this Digital Banking License when there are no existing regulations to control and to protect members of the public especially the B40, students and the like. 

To Date No Regulations are In Place To Regulate Digital Banking

On 15.3.2022, it was reported in The Edge that Ministry of Finance, BNM and the Securities Commission (“SC”) are “spearheading collaborations with other agencies” to draft a new law known as the Consumer Credit Laws to regulate BNPL schemes and the like HERE

For the benefit of BNM, Minister of Finance and SC, since 2021 BNPL schemes have already been in use in e-commerce namely Shopee. This is how BNM and SC protect public interest in Malaysia! Of course, proactivity is not the norm in Malaysia. The authorities will only become “kalam-kabut” when there were public outcries and/or many B40s are in hot soup! 

China and Australia Have Regulations In Place To Regulate BNPL Scheme

In China, the Banking Regulatory Commission has capped interest rates and financing fees for microloans (including BNPL schemes), and banned students from access from microloans in order to protect them. HERE.

In Australia, its Financial Industry Association has developed a binding Code of Practice for BNPL Providers whereby these providers are obligated to ensure that their terms and conditions are written in plain English and are clearly distinguishable from marketing materials. There are stringent rules that regulate these BNPL providers in their advertising materials for these BNPL schemes in order to protect vulnerable consumers like the B40s, HERE.

On Paper BNM Seems To Know Its Role As a Central Bank

On 31.12.2020, BNM seems to know its role as the central bank in Malaysia and came up with the Licensing Framework for Digital Banking Digital (“FRAMEWORK”), HERE.

For ease of reference, paragraph 1.1 of the said Framework dated 31.12.2020 states as follows:

“The Bank endeavours to ensure the regulatory framework remains conducive for enablement of these innovations in a safe and sound manner that supports transformation of the financial ecosystem to meet future economic needs of the nation, and promote sustainable and inclusive financial sector.”

Under paragraph 8.2 of the said Framework, the criteria to be taken into account when assessing the suitability of the shareholders of a licensed digital bank include the following:

In the Frequently Asked Questions for the said Framework:

 “…nature and sufficiency of the financial resources of the proposed licensed digital bank shareholder as a source of continuing financial support to a licensed digital bank as well as the business record and experience of the shareholder

  • Robust risk management and compliance capabilities, which may be demonstrated by a track record of operating in a regulated environment;
  • Ability to continuously serve as a source of financial strength to the proposed licensed digital bank. 

See in HERE

PN17 Companies Or Its Related Companies

Normally, if a company is being classified under PN17 or to be classified under PN17 or pending formal classification of PN17, no financial institution will grant them any banking facilities to it or its related companies or subsidiaries.  As for the case of AirAsia has been classified as PN17 company in January 2022.

On 14.1.2022, it was reported in The Edge that in July 2020, the auditor for AirAsia (Messrs Ernst & Young) had “issued an unqualified audit opinion with material uncertainty relating to going concern”, HERE.

AirAsia was given 12 months to regularise by 7.1.2022.  On 7.1.2022, AirAsia sought an extension of time from Bursa KL (“BSKL”) but it was turned down by BSKL. On 13.1.2022, AirAsia announced in BSKL that it had been classified as a PN17 company, HERE

The International RM200 mil Bribery Scandals Involved PN17 AirAsia Executive 1 & 2 & Airbus

It must be noted that in the Judgement of UK Crown Court in January 2020, it was clearly stated that AIRASIA executives 1 and 2 have been found to have received RM200 million in BRIBES from Airbus in exchange for orders of aircraft, HERE

This news had been widely publicisely internationally. Airbus agreed to pay over $3.9 Billion in Global Penalties to Resolve Foreign Bribery Scandals, HERE.

However, in Malaysia the two criminals known AirAsia executives 1 and 2 were allowed to run amok in the corporate world. Authorities in Malaysia and regulatory bodies are playing dumb to condone and encourage such briberies.

Lapsed of More Than Two Years Chairman of SC & SC Playing Dumb

Left: Datuk Syed Zaid Albar, Chairman of SC. Centre: Senator Tengku Zafrul Aziz, Minister of Finance

Early 2020 SC and Bursa KL had commenced investigations into this international bribery scandals. SC had instructed Bursa KL to stop its investigation as it was taking over the task. After a lapsed of two years, Datuk Syed Zaid Albar the chairman of SC and SC are still keeping their elegant silence over the said investigations, HERE.

Lets see for how long more Datuk Syed Zaid Albar and SC are going keep their elegant silence over this international bribery scandals.

We can only hope that Bank Negara and its Governor are not in the same category as Datuk Syed Zaid Albar and SC!.

Danajamin Approved RM500 mil Loan Guarantee Facilities To PN17 AirAsia

The newly minted Chairman of Bank Pembangunan Bhd, another famous Datuk Nazir Razak who was the former CEO of CIMB Bank. Danajamin is under it. Nazir is a buddy with Tony Fernandes of AirAsia

Recently Danajamin headed by Datuk Nazir Razak had granted RM500 million loan guarantee to PN17 AirAsia. It is an open secret that Datuk Nazir Razak is the buddy of Tan Sri Tony Fernandes of PN17 AirAsia. Thanks God that AirAsia rejected the RM500 mil facilities because its directors, Tan Sri Tony Fernandes and Datuk Kamarudin Meranun refused to stand as guarantors for the said RM500 mil facilities otherwise the Rakyat may be burdened by this RM500 mil. This is the level of confidence that both directors, Tony and Kamarudin have for PN17 AirAsia. See in HERE.

In 2019 The Executive Chairman of AirAsia, the famous Datuk Kamarudin Meranun Fined For Insider Trading

The famous Datuk Kaamruddin Meranun, when he was appointed as a director of MAS
during the infamous MAs-AirAsia Share SUAP.

The famous Datuk Kamaruddin Meranun is the executive chairman of AirAsia Group. In 2019 Kamaruddin was not charged by SC for insider trading during the infamous MAS-AirAsia share SUAP and he was only fined RM3.6 million, which was a pittance and extremely unusual.  Kamaruddin trade shares bought under the names of Nor Ashikin Khamis and Malizan Mahmood. SC had explained:

“The amount disgorged from Datuk Kamarudin Meranun is equivalent to three times the difference between the price at which the shares were acquired and the price at which the shares would have been likely to have been acquired at the time of the acquisition, if the information had been generally available.” In HERE.

For the benefits of BNM Governor and Tengku Zafrul, the best Minister of Finance in Malaysia of all times, the above information are in the public domain. Can a central bank in any part of the world still consider, let alone approve the digital banking license or any financial license to a PN17 company’s related companies or its subsidiaries? 

So-Called Bank Negara Framework For Digital Banking

An applicant is further required to provide Bank Negara Malaysia with an independent external review on the feasibility of the business plan as per paragraph 10.4 of the said Framework. The said independent external review must also include an assurance that the applicant’s financial statements are accurately prepared and adequately disclosed to Bank Negara Malaysia.

This is the financial statement as filed with SSM.

According to the above financial statement filed with the Suruhanjaya Syarikat Malaysia as of 14.3.2022 showed that BigPay (M) Sdn Bhd had made losses to the tune of RM59,062,000.00!

BigPay Later Sdn Bhd

The financial statement filed by BigPay Later Sdn Bhd with SSM.

BigPay Later Sdn Bhd, another outfit of AirAsia, was only incorporated on 20.7.2020 with no financial information filed with SSM for 2022.  

Good Governance

For the sake of good governance and the objective of protecting public interests, both BNM and the best Minister of Finance of Malaysia should not wear blinkers and approve any form of financial licenses in a wanton manner to PN17 companies or its related companies, which are under controlled friends.

Public interest dictates that Minister of Finance and the BNM Governor must clarify this matter before approving the Digital Banking Licence to the five selected companies.