The Malaysian leader was asked if local banks would be in a better position to stave off competition from foreign entities after the mergers, set to be completed by the end of the year.

"I have my doubts because foreign banks are also merging,"the official Bernama news agency quoted Mahathir as saying upon arriving in Malaysia's capital at the end of a three-week holiday in Latin American, the Caribbean and London.

All of Malaysia's 55 commercial banks, finance companies and merchant banks submitted merger plans to the central bank by a January 31 deadline. Ten banks were believed to be vying for core banks status.

Bank Negara was expected to take at least a month before deciding whether to accept or reject the proposed groupings.

The central bank dropped an earlier plan under which the government had identified the core, or anchor, banks and their partners, and instead has given them until the end of this year to complete the merger process.Mahathir said that although local banks were merging to strengthen their position, their bigger foreign counterparts were doing the same.

"As I have mentioned to a lot of people, there is a tendency for oligopoly, meaning that in this world there are maybe five huge banks, five automobile companies," he said.

He said that in this scenario, huge industries would dominate others, citing the aircraft manufacturing industry where there were just two main companies now. Mahathir said such concentration was the outcome of the globalisation process where smaller countries would have less say and gained less benefit. "It's ridiculous," he said. "We will all be swallowed. I am not against globalisation but against the interpretation of globalisation."