September 1, 2012
Tunku Aziz looks back at his time in Bank Negara
by Tunku A. Aziz
AS a former central banker, I congratulate Tan Sri Dr Zeti Akhtar Aziz, the governor of Bank Negara Malaysia, on maintaining the high standards of governance set by the first Malayan head of BNM, Tun Ismail Mohamad Ali.
Thankfully, most of our BNM governors have been men and woman of outstanding moral and ethical character. The best BNM stewards in my book are Tun Ismail, Tan Sri Aziz Taha and the current incumbent.
I have always said in my speeches and articles over the years that BNM is the best managed institution in the country, followed by Petronas, the national oil company under Datuk Rastam Hadi and, later, Tan Sri Hassan Merican. The rest of our national institutions are, by comparison, second rate.
But led by competent men and women of impeccable character, even an indifferent institution will have a sporting chance of success eventually.
My own working relationship with Ismail Ali began in a curious way. Tun Dr Ismail Abdul Rahman, the third most powerful man in government, resigned from the cabinet in the late 1960s, something he had threatened to do for some time.
He was appointed Chairman of Guthrie Ropel, part of the Guthrie group that I joined towards the end of 1964. Although only a “second tour” assistant, I was frequently asked by Dr Ismail Abdul Rahman to brief him on the plantation companies I was looking after.
One day, quite out of the blue, he said, “Tunku, I think you are wasting your time in a plantation company. Go and see Ismail at Bank Negara. I have spoken to him about you.”
Ismail Ali captured my imagination with his vision for the bank. He wanted it, in time, to rival the Bank of England, which he admired greatly, in its integrity and the quality of economic and financial advice rendered to the British government. He saw the role of BNM as an important one in promoting and developing a sound financial system.
The bank, he declared, must be “efficient to the point of ruthlessness”. He thought I was the right person to implement the international consultants’ recommendations that the bank had commissioned on its tenth anniversary.
I came on board as adviser, or in today’s terms, assistant governor. I regarded my leaving the corporate sector as temporary leave of absence, taking a big drop in salary, to serve my country.
Ismail Ali did not tolerate inefficiency, and dishonesty in whatever shape or form was dealt with seriously. It was my unpleasant duty to dismiss from service two of our brightest officers.
In the case of one, he was caught playing the market extensively while on duty. When the telephone printouts of his outgoing calls over a period of some months were presented to me in the course of our investigation, the evidence for severe disciplinary action was irrefutable. He later became extremely rich as a stock market player in a foreign country.
The other officer, who had access to vital bank information, had compromised and abused his position by borrowing and then defaulting on loans from Kuala Lumpur-based foreign banks. When the matter was brought to Ismail Ali’s attention, he asked me how I intended to proceed.
There could only be one outcome in these cases. Both of them were dismissed after due investigation. No double standards as far as we were concerned.
In my experience of operating in senior positions, both domestically and in international organisations, I have worked with some professionally outstanding people from diverse backgrounds. Many of them did not reach their full potential, falling by the wayside, because they failed to recognise the importance of inculcating ethical standards in business behaviour.
As we celebrate our 55th anniversary of Merdeka, let us urge the government to pay particular attention to governance principles that are firmly grounded in fairness, justice and equity.
Let us also remind the government that in return for our support for its Economic Transformation Programme, we expect to see a change in the way policies are formulated and implemented.
We want policies that are inclusive, taking full account of the needs of all of our citizens. Is the government up to the task to govern the country solely in the public interest?
I know the Prime Minister is working his guts out and I know he will get our support, provided he has the political will and courage to put the best people in charge without regard to race or religion. He will look even better surrounded by the best the country has to offer.
Let this Merdeka Year be the beginning of greater things to come so that our Malaysia need no longer be on the defensive. Look no farther than Bank Negara Malaysia for inspiration.