Raising ASB, ASB2 limit to RM300,000 will inculcate savings culture amid rising interest rate regime

The maximum individual limit for Amanah Saham Bumiputera (ASB) and ASB2 which has been raised to RM300,000 starting 2023 would further inculcate the savings culture and investment habit among Malaysians, amid a rising interest rate environment, said an economist.

Bank Islam Malaysia Bhd chief economist Firdaos Rosli said the higher maximum limit announced under Budget 2023 was a good move as it would encourage households to save either via a higher disposal income or ASB financing.

“I think it is a good move amid a rising interest rate environment.

“We can expect returns on risk-free assets to rise along with the overnight policy rate (OPR).

“It will encourage households to save either via a higher disposal income or ASB financing,” he told Bernama. 

On Friday, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz when tabling Budget 2023 said the maximum individual limit for ASB and ASB2 was raised to RM300,000 from RM200,000 starting in 2023.

The minister said Bank Simpanan Nasional (BSN) will also provide easy financing to assist the B40 Bumiputeras to invest in ASB with loans offered at a rate of 1.5 per cent for funding of RM100,000.

Meanwhile, Malaysia University of Science and Technology economics professor Dr Geoffrey Williams opined that generally anything that encourages people to save and invest is positive, provided that there are tax incentives attached.

“Hence, increasing the limit only helps if you get generous tax offsets.

“Otherwise, this change will only affect wealthy people and will not have so much of an effect on lower-income Bumiputeras. Of course, other groups are not eligible,” he said.

Citing information from the Employees Provident Fund (EPF), he said the Bumiputeracommunity was the worst affected by withdrawals and have the lowest savings.

“So, it might be better to save and rebuild your account in the EPF where the dividend is higher.

“In that sense, you have government-linked investment companies competing for Bumiputera funds which does not make much sense if the aim is to promote financial security especially for the long term and for pension,” he added. 

Meanwhile, Permodalan Nasional Bhd (PNB) president and group chief executive Ahmad Zulqarnain Onn said PNB is honoured to be given the opportunity to further inculcate the savings culture and investment habit among Malaysians. 

“It is in line with PNB’s mandate to increase the economic wealth of the Bumiputera community and all Malaysians, for the prosperity of the nation,” he said in a statement Friday.

PNB said details of the increase in ASB and ASB 2 investment limits will be announced by its wholly-owned unit trust management company, Amanah Saham Nasional Bhd, in due course. — BERNAMA / TMRPic

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