Let’s have Penang state bank for projects, says rep

Penang assemblyman Zolkifly Md Lazim says the state bank can help finance the RM47 billion Penang Transport Master Plan. (Youtube screengrab)

GEORGE TOWN: A Penang assemblyman has proposed setting up a state bank to fund large infrastructure projects such as public transport and highways.

Zolkifly Md Lazim (PPBM-Telok Bahang) said for starters, an enactment could be passed in the state assembly to form the bank and a line of credit be issued.

He said to start a bank, a cash reserve of RM1 billion and regulatory approvals from Bank Negara were required.

Penang already has over RM1 billion in reserves.

After the bank is formed, he said a RM47 billion credit can be issued via the Kuala Lumpur Interbank Offered Rate (KLIBOR), which was a platform that enabled commercial banks to lend each other money through their reserves.

“When the federal government says ‘we do not have money’ for projects, then this state bank can help finance the RM47 billion Penang Transport Master Plan (PTMP).

“The state bank can issue a credit line without costs,” he said in his debate thanking the governor’s address in the evening session today.

Zolkifly said this would also negate the need for Penang having to take loans from the Chinese government to complete the PTMP.

“Penang’s own state bank will help us get over the problem of lack of funds without having to rely on others.

“We must remember the ringgit is created under the law as fiat money by the Parliament. This state assembly can also do the same, by forming a state bank, but of course, through the approval from the central bank.”