This article first appeared in Corporate, The Edge Malaysia Weekly, on May 2 - 8, 2016.
IT had been a cloak-and-dagger situation up until the last moment of the official announcement on April 27 naming Datuk Muhammad Ibrahim as the new central bank governor. Until then, theories abounded as to who would be the new governor, and whether he would hold an “acting” position prior to assuming the post.
All that speculation has been put to rest.
Muhammad, or DGMI as he is fondly known in the banking fraternity, is the new governor of Bank Negara Malaysia — replacing Tan Sri Dr Zeti Akhtar Aziz — much to the delight and relief of many. He was the central bank’s deputy governor.
The local currency rallied as investor concerns eased following the news. The ringgit rose as much as 0.46% to 3.897 against the US dollar the following day.
Muhammad started his five-year term on May 1.
As he is new to many people outside the industry, The Edge contacted several top bankers to get their views on him and his personality as well as his working style.
Muhammad — who has over 30 years of experience at the central bank — is very hands on, engages with bankers often and has his ear to the ground, bankers say.
“He is a professional and a no-nonsense kind of guy. He gets the job done efficiently and he doesn’t like to sit on things,” says a bank director who had worked with Muhammad for over a decade.
Datuk Sulaiman Mohd Tahir, group CEO of AmBank Group, says the appointment from within provides “continuity and stability”.
“He is a good guy — very straightforward and very clear on what he wants. When he deals with us bankers, there is no doubletalk. The messages are very clear and that is good,” Sulaiman tells The Edge.
“Sometimes, the message from him can be painful, but it is something we have to do — and we do it. He does have many dialogues with the industry. Sometimes he can be tough but that is good … in this business, you need to be tough,” he says.
Joel Kornreich, group CEO of Alliance Bank Malaysia Bhd, says Muhammad is well known as someone who continually enhances his knowledge of the industry and derives well-informed views and policies through an objective analysis of the data and frequent dialogue and engagement.
“He is pragmatic, deeply experienced and resolutely focused on driving innovation in payment systems and the financial industry in general in order to improve efficiency, financial inclusion and the general welfare of Malaysians,” says Kornreich.
Datuk Khairussaleh Ramli, group managing director of RHB Banking Group, says, “Datuk Muhammad is hands-on and has been working with the industry closely. We look forward to supporting him in bringing the industry to greater heights.”
Tan Sri Azman Hashim, chairman of the Malaysian Investment Banking Association, points out that the people in the financial sector know Muhammad well and they are confident he will be able to live up to the high standards of the institution.
Ong Eng Bin, CEO of OCBC Bank (M) Bhd, says Muhammad always has the interest of the banks at heart and knows the important role they play in helping the economy achieve sustainable growth and be efficient.
“He has a deep interest in the human capital development aspect and wants Malaysia to continue to be an attractive place for people to work in, contribute and succeed.
“I am sure with his appointment as governor, we will continue to benefit from his wisdom and have full confidence that he will preserve the strong legacy of Bank Negara that has enabled us to progress so well,” he adds.
Muhammad has served Bank Negara since April 1984 and was appointed deputy governor in 2010. A chartered accountant, he is a Universiti Malaya graduate and holds a master’s degree from Harvard University.
He was one of the candidates touted to replace Zeti when her tenure ended on April 30. Others included Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar and former Malaysian Ambassador to the US Datuk Awang Adek Hussin.
All eyes on Muhammad
Undeniably, Muhammad is taking the helm at a time when the country is encountering uncertainty on many fronts.
Its economy is experiencing a confluence of turbulent factors — high household debt, soft consumer spending and a weak local currency — while the country is in the global spotlight due to troubled state fund 1Malaysia Development Bhd (1MDB).
Two working days before Muhammad took over the governor’s role, Bank Negara issued a compound to 1MDB for its failure to fully comply with directions under the Financial Services Act 2013.
“This includes a requirement for 1MDB to repatriate monies remitted abroad following the revocations of the three permissions granted by Bank Negara to 1MDB in 2009, 2010 and 2011,” the central bank said in an April 28 statement.
1MDB has been given until May 30 to pay the compound. “The payment of the compound marks the conclusion of the investigation by Bank Negara on the contraventions to the rules and regulations of the central bank,” it added.
It looks like Zeti, who retired after 16 years of service with the central bank, has tried her best to ensure a fairly smooth start for the new governor.
Just how smooth it will be remains to be seen. But one thing that is likely to change is Muhammad’s nickname, DGMI — to GMI.
Save by subscribing to us for your print and/or digital copy.
P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.