SHAME ON YOU ZETI! Having a bank account doesn’t mean you have savings - researchers rap BNM chief

A person can hold one or more bank accounts yet have hardly any money in them, researchers said, refuting Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz’s claim that more than 90% of Malaysians have savings because they possess bank accounts.

In defending the Malaysia Human Development Report 2013 which stated that 53% of Malaysians have no financial assets, Tan Sri Kamal Salih, Dr Muhammad Abdul Khalid and Dr Lee Hwok Aun said that while their findings were staggering, they were derived from inclusive and reliable sources.

“The Bank Negara Malaysia governor refers to Bank Negara Malaysia data that shows 'more than 90% of our population have saving accounts'. It is methodologically and empirically insufficient to equate savings with mere possession of a savings account.

“The majority of Malaysians have bank accounts, and some even open multiple bank accounts, but one can have a bank account without savings,” said the authors of the report in a statement to The Malaysian Insider.

On Thursday, Zeti said the report only had “partial information” and could be described as “misleading”, adding that the central bank’s data covers the overall financial inclusion.

But the researchers said they had discovered that the majority of Malaysians had zero savings after looking into the Household Income Survey, which was provided by the Department of Statistics and the Economic Planning Unit, under the Prime Minister’s Department.

“The Household Income Survey data captures reported interest and dividends from commercial entities, cooperatives and other savings institutions, across both formal and informal sectors.

“Thus, the survey data is more extensive and inclusive, encompassing more than formal banking accounts,” said the researchers.

Zeti had argued that people would surely have savings or would save when they have purposes, such as in Tabung Haji for pilgrimage and Malaysia Building Society Berhad (MBSB) for the purchase of properties.

“They probably looked at savings in the banking system but they don’t look at savings (in the non-bank financial intermediaries) like Tabung Haji and koperasi (cooperative),” she was quoted as saying by Bernama.

But the researchers reiterated that the report’s estimate of household savings excludes forced savings such as the Employees Provident Fund (EPF) because they were only interested in precautionary savings.

“The report does capture investment in Tabung Haji and PNB (Permodalan Nasional Bhd) and other investments, which we define as financial investment, not savings. Our data shows that 57% of Malaysians have no financial investments.

“This is consistent with data from Tabung Haji which shows that about two-thirds of Muslims do not have an account with Tabung Haji, while about half of Bumiputera do not have an account with ASB (Amanah Saham Bumiputera).”

They added that they welcomed constructive and critical engagements on the report so as to have an informed debate in the interest of the country.

The report, launched on Tuesday, was commissioned by the United Nations Development Programme (UNDP).

It revealed that 90% and 86% of rural and urban households, respectively, had no savings, while the majority of households at 88% had zero earnings from their savings. –TMI