PUTRAJAYA, Malaysia, April 27 (Reuters) - Malaysia on Monday announced new measures to boost the country's financial services sector, allowing greater foreign stakes in investment banks and insurers, but keeping limits on commercial banks.
Following are the liberalisation measures as detailed by the central bank. For related story click on [ID:nKLR459140]
Issuance of new licences
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- Up to two new Islamic banking licences will be given in 2009 to foreign firms to set up banks with paid-up capital of at least $1 billion;
- Up to two new commercial banking licences will be given in 2009 to foreigners that have specialised expertise to address gaps in the financial sector such as construction, agriculture and infrastructure;
- Up to three new commercial banking licences will be offered in 2011;
- Up to two new family Islamic insurance licences will be granted in 2009.
Increase in Foreign Equity Limits
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- Existing domestic Islamic banks can enter into partnerships with foreign players through an increased foreign equity limit of up to 70 percent. These banks will be required to maintain a paid-up capital of at least $1 billion;
- Foreign equity participation in investment banks, conventional and Islamic insurers will be increased to a limit of up to 70 percent;
- A higher foreign equity limit beyond 70 percent for insurance companies will be considered on a case-by-case basis for players who can facilitate consolidation and rationalisation of the insurance industry.
- However there was no move on the 30 percent limit on foreign ownership of commercial banks Operational flexibilities -------------------------
- Locally-incorporated foreign commercial banks can establish up to ten microfinance branches. Further branches will be considered based on the effectiveness of these branches in serving microenterprises;
- Locally-incorporated foreign commercial banks can establish up to four new branches in 2010 based on a distribution ratio of 1(market centre): 2(semi-urban): 1(non-urban)
- Locally-incorporated foreign insurance companies and takaful operators are allowed to establish branches nationwide without restriction;
- The restriction for locally-incorporated foreign insurance companies and takaful operators to enter into bancassurance/ banctakaful arrangements with banking institutions is now lifted;
- Banks, insurance and Islamic insurance firms can employ specialist expatriates;
- Offshore banking institutions licensed by the Labuan Offshore Financial Services Authority that meet the predetermined criteria can have a physical presence onshore from 2010. source: www.bnm.gov.my
(Reporting by Liau Y-Sing and Julie Goh; Editing by David Chance)
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