Datuk Zamani Abdul Ghani: Role of development financial institutions in the financial system Speech by Datuk Zamani Abdul Ghani, Deputy Governor of the Central Bank of Malaysia, at the International CEO Forum of the Development Finance Institutions 2005, Kuala Lumpur, 12 September 2005. *  *  *  I would like first of all to express my sincere appreciation to the Association of Development Finance Institutions of Malaysia for inviting me to say a few words this morning on "The Role of Development Financial Institutions (or DFIs) in the Financial System". It is indeed an honour to address such a distinguished gathering of CEOs and senior officials of DFIs from many parts of the world. Before going further into the subject at hand, allow me to congratulate the organisers for jointly putting up this international forum. This forum provides a platform for CEOs and senior officials to exchange views and ideas on SME development and just as important, the roles of DFIs in this endeavour. I would also like to specifically welcome the foreign participants to Malaysia and wish that you will have a pleasant and enjoyable stay in Kuala Lumpur. My remarks this morning will consist of three parts. The first provides an overall perspective on the universal establishment of DFIs in many parts of the world; the second will look at the prospects and some of the challenges for DFIs in carrying out their roles; and the final part will provide an insight into the roles of DFIs from the Malaysian perspective.
The basic banking account has no minimum balance requirement and offers free ATMs and debit cards to those who qualify. The scheme is expected to roll out by October this year. The Bank of Thailand is also undergoing regulatory reform to review outdated rules and regulations, to facilitate ease of doing business and ensure that our regulations do not impede competition and innovation and contribute to high costs of financial services. We started with foreign exchange regulations last year and are now reviewing banking regulations to improve digital banking environment and SME financing. In addition, the current backdrop of high household debt in Thailand and the need to improve individual’s financial safety net necessitate an overall improvement in financial literacy as well as financial planning skill. We have also tightened our market conduct regulations to ensure that misselling is minimized and financial institutions provide fair and transparent products and services. Given the growing importance of digital technology for financial services, we must also make sure that those with lower skills can reap the benefits that technology brings, to avoid digital divide. Last but not least, creating a financial ecosystem that values sustainability is critical to ensure that the Thai financial system of the future can continue to develop in such a way that would benefit all segments of the society and create minimal negative externalities. Later this month, the Bank of Thailand will host the first Bangkok Sustainable Banking Forum.