10-13% of new bankruptcy cases from 2021-2024 involve civil servants, says MDI DG


PUTRAJAYA: Between 2021 and 2024, civil servants accounted for approximately 10 to 13% of new bankruptcy cases, says the Malaysian Department of Insolvency (MDI) director-general Datuk M. Bakri Abd Majid.

He expressed concern over the rising trend of bankruptcies among civil servants, noting that this increase contrasts with the overall decline in national bankruptcy statistics.

Based on MDI's open data, he said the percentage of bankruptcies among public sector employees was 12% in 2020, 10% in 2021, 11% in 2022, 13% in 2023 and has already reached 14% in 2024.

"The inability of public servants to manage their finances effectively not only impacts them and their families but also has broader implications for the public service ecosystem,” he said in a statement on Monday (Sept 9).

He added that civil servants declared bankrupt could face disciplinary actions due to severe indebtedness, which damages the reputation of the public service. This situation may also hinder their chances for salary increments, promotions and eligibility for bonuses and financial assistance.

In some instances, civil servants have opted to declare bankruptcy to alleviate the prolonged stress of mounting debts.

From an administrative perspective, Bakri said department heads must monitor their staff's financial health and remain alert to any behavioural changes.

ALSO READ: New pay scheme a relief for civil servants, says Cuepacs

"Early preventive measures are crucial, including increasing activities focused on personal financial management.

"Departments should also consider collaborating with certified financial advisors or experts to address financial management issues," he said, adding that failing to do so could open the door to corruption and misuse of power within departments.

Regarding the Public Service Remuneration System and the recent salary adjustments, he acknowledged that while these changes could provide some relief, there are still those who may exploit the situation by offering 'bad loans' to vulnerable staff members.

"This 'vicious cycle' must be stopped to prevent further financial instability among civil servants. The cooperation of all parties, particularly department heads, is crucial in addressing this issue.

"With the new salary scheme, public sector employees are expected to enhance their work practices and productivity. However, this also necessitates a shift in mindset," he added. - Bernama

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

MDI , Insolvency , Bankrupt , Civil Servants

   

Next In Nation

Severe continuous rain warning for Sabah, Labuan lifted
Missing fishermen found safe near Acheh waters
Early schooling aid extended to Form Six students
G25: Khalwat offenders are not criminals, public whipping violates Federal Constitution, Syariah courts
Businessman loses RM800,000 in bogus investment scheme
Ministry not taking lightly resignation of over 6,000 doctors over past five years, says Dr Dzul
Sandakan senior citizen medically evacuated due to serious eye injuries
Child killed, three hurt after four on a motorcycle collides with lorry
Strong winds damage structures in Semporna
Malaysians harassed at Jakarta music fest, 18 Indonesia cops nabbed

Others Also Read