Malaysia's Bank Negara governor restructures senior roles just two weeks after joining

A general view of the Bank Negara Malaysia in Kuala Lumpur, Malaysia.
A general view of the Bank Negara Malaysia in Kuala Lumpur, Malaysia. PHOTO: REUTERS

PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Barely two weeks since Datuk Nor Shamsiah Mohd Yunus began her tenure as Bank Negara governor, the country's central bank has already carried out a shake-up of the roles of its senior officers.

The change is reflected in an updated version of Bank Negara's organisation structure that was uploaded on its website

A small note at the bottom right hand of the chart stated that the changes will come into effect on Sunday (July 15).

A notable change is the Financial Intelligence and Enforcement Department (FIED), which is now strengthened with higher priority.

A deputy governor will now oversee the department under Nor Shamsiah's leadership.

Nor Shamsiah spearheaded investigations into the 1Malaysia Development Bhd (1MDB) state fund when she was deputy governor.

She made a return to the central bank after her role as the new governor was announced on June 22.

The central bank is also doing away with the role of chief of staff - a position which reports directly to the governor.

The position was created by Nor Shamsiah's predecessor Muhammad Ibrahim in 2016.

Among the areas of responsibilities for the chief of staff were the governor's office, strategic communications and strategic management departments.

Tan Sri Muhammad tendered his resignation early June after questions were raised on the central bank's purchase of a piece of land from the Federal Government for RM 2 billion (S$674.7 million).

The transaction was completed in January this year and the proceeds were used to pay 1MDB's debts.

Nor Shamsiah's term officially started on July 1. She was with Bank Negara for almost 30 years before she left on Nov 15, 2016.

She then joined the International Monetary Fund (IMF) in Washington DC as the assistant director of Monetary and Capital Markets Department.

Her last day with the IMF was June 29.

Under the revised organisation structure, Nor Shamsiah has also reduced the layer of authority for two critical departments - the Economics and Monetary Policy.

These two departments used to report to a deputy governor. Effective Sunday, an assistant governor will oversee the two departments and report directly to the governor.

Other changes include six out of eight assistant governors having their areas of purview swapped while 11 out of 37 departments saw directors swapping portfolios.

Three assistant governors are also taking on additional roles as directors in departments.

Experts say the restructuring will be viewed positively by the market.

Alliance Bank Malaysia Bhd chief economist Manokaran Mottain said the appointment of Nor Shamsiah as the governor itself was already a sign of strengthening the independence of the central bank.

"In this case (the restructuring), I see it as in line with the aspirations of the governor. With the FIED being put under a deputy governor, this means that might be a bigger role waiting for that department and somebody with a higher authority is needed there.

"The governor cannot be looking into everything, so in a way this is a good thing and the market will definitely be positive about this," he said.

He added that Datuk Abdul Rasheed Abdul Ghaffour, the deputy governor overseeing FIED, is someone with a strong background in inspection and banking supervision.

Manokaran also said having the Economy and Monetary Policy departments reporting directly to Nor Shamsiah was also something similarly done by former governor Tan Sri Dr Zeti Akhtar Aziz until a deputy governor was appointed to supervise it.

"These two departments are very important for the central bank because the central bank itself is the authority for monetary policy.

"Back then, these departments reported directly to Dr Zeti until Dr Sukhdave (Sukudhew Singh) became the deputy governor," said Manokaran.

He added that there was talk in the market about the return of Dr Sukhdave to the central bank as he is known as the man of monetary policy.