31.   Lodin said the group will still give out loans to the productive sector, but it will be very selective.

32.   Nevertheless, we still find the IT industry a productive sector.

33.   On Wednesday, Economic Adviser to the Government Tun Daim Zainuddin criticised banks for being unnecessarily strict in their lending which has affected even the productive sectors.

34.   Productive sectors are defined to include manufacturing, agriculture, mining, trade financing, general commerce, power generation and distribution, and transport and storage.

35.   Productive sectors include manufacturing, agriculture, mining, trade financing, general commerce, electricity, transport storage and high-tech industries.

36.   Since many productive sectors such as industry and commerce required cash flow to sustain business operations, draining liquidity was equivalent to forcing them out of business.

37.   Specifically the SRR reduction will help the economic recovery by releasing additional funds into the financial system that would be channelled to productive sectors.

38.   Similarly, banks cannot expect people to use their services, if loans, even for the most productive sectors, are difficult to obtain due to self-imposed restrictions.

39.   Since the Government has directed banks to focus lending to productive sectors like manufacturing and agriculture, such companies should have no problem, he said.

40.   The bank also outlined the various funds and schemes that would ensure productive sectors are not denied access to reasonable rates of financing.