The transparency and disclosure standards on banking products and services are also currently being  BIS Review 40/2003  5  enhanced to equip consumers with the ability to make informed financial decisions. It is envisaged that consumers will play a bigger role in instilling market discipline amongst financial players. A deliberate reform of our payment system has also been undertaken to ensure that the payment system is stable and efficient. In July 1999, Bank Negara Malaysia implemented a Real Time Gross Settlement System known as RENTAS for inter-bank funds transfer to reduce the credit and settlement risk in the financial system. The RENTAS system also handles scripless debt securities trading, processing and settlement system on a real time Delivery versus Payment model that reduces counterparty risk substantially. In addition, a range of retail payment systems has also been implemented to further increase payment system efficiency through electronic channels, which include the introduction of Inter-bank Giro, Internet banking, mobile banking and the electronic purse. Cards have also rapidly become an important payment instrument in Malaysia. In maintaining public confidence in using payment cards, Malaysia has taken steps to combat credit and ATM card fraud. Malaysia is the first country in the Asia Pacific region that had mandated the migration of ATM cards to chip based cards and the second country after Taiwan to implement the migration to EMV chip based credit cards, targeted to be completed by end-December 2005.

The recent enactment of the Payment Systems Act 2003 is also a testimony to the Bank’s commitment for greater payment system oversight, and to provide legal certainty to the finality of payment instructions carried out through major payment systems. Social responsibility of banking institutions Sustaining growth in emerging economies requires stability to be preserved in the macroeconomic environment, the financial system and markets as well as social environment. The responsibility of achieving social stability and development should no longer be the exclusive domain of the government. The focus on short-term returns should not be at the expense of long-term sustainability. It is increasingly being advocated that corporate social responsibility is an important part of the business environment. Corporate social responsibility refers to operating business in a manner will also contribute to economic development while improving the quality of life of the workforce and local community and society at large. The banking institutions, being the main provider of financing in the economy, need to assume a much greater role in contributing towards the long-term development of the small and medium-sized enterprises (SMEs). In developing the SME industry into strong and resilient enterprises, banking institutions need to reassess their relationships with the SMEs as financing alone will not guarantee the long-term success of the SMEs. The traditional relationship between creditor and debtor has to evolve into a business partnership whereby banking institutions are expected to play a more participative role in identifying gaps in processes, skills and expertise as well as usage of technology.