Malaysia Says Banks `Well Placed’ to Provide Loans

Oct. 30 (Bloomberg) — Malaysia’s banks are “well placed” to maintain lending as there is ample liquidity in the banking system, Bank Negara Malaysia, the central bank, said today in a statement after officials met with finance industry executives.

Banking industry leaders were told at the meeting to practise “responsible lending” and ensure there wasn’t any “indiscriminate withdrawal or rejection of credit lines,” the statement said, without identifying executives or banks.

Malaysia’s economy may expand 5 percent this year, Finance Minister Najib Razak said Oct. 24. That’s lower than the 5.7 percent rate that the government forecast in August amid a credit crisis that started in the U.S. and has spread to Europe and Asia, tipping the world economy close to a recession.

“Banks should be proactive in dealing with their customers,” the central bank statement said. The meeting with the executives was to address “issues relating to current economic developments and business conditions,” it said.

Bank Negara said Oct. 24 inflation had peaked and risks to global growth have increased “significantly.” Malaysia will cut its 2009 economic growth forecast on Nov. 4, Najib said earlier this month.