Bank branching and regional development in Malaysia

The regional imbalance in the Malaysian economy has long been recognised and continues to be a problem for development planning. The federal government has attempted to promote banking in the less developed regions in order to generate economic growth. Bank branches in Malaysia have increased in number and have also become regionally more dispersed. However, the regional concentration of bank branches is strongly associated with individual incomes. Hence, the growth of banking in Malaysia appears to be demand‐following rather than supply‐leading. Nevertheless, the intentional promotion of banking is continuing and beginning to produce some encouraging results.