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Malaysia operates a dual banking system, namely a conventional banking system operating in tandem with an Islamic banking system. Islamic. The Central Bank of Malaysia is the Malaysian central bank. Established on 26 January as Central Bank of Malaya (Bank Negara Tanah Melayu), its main . A banker’s duty of secrecy in Malaysia is statutory as it is clearly provided Act (“BAFIA”) (currently replaced by section (1) of the FSA.

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The role the committee is set out in more detail in Question Its headquarters is located in Kuala Lumpurthe federal capital of Malaysia. The next concern is whether an ex-employee of a bank is also bound by the duty of secrecy. Retrieved 23 January The Labuan FSA generally requires 30 business days to process an application for a banking licence on receipt of a completed application form.

Bank or financial holding company in Malaysia which is a subsidiary of a foreign institution. The affairs of a bank or financial holding company which is a subsidiary or associate of a foreign institution.

Banking & Financial Institutions Act (BAFIA)

What is the legal framework for banking regulation? Various incentives are accessible to financial institutions participating in the MIFC initiative, including new licences for conducting foreign currency businesses, attractive tax incentives and facilitative immigration policies.

Any office of a bank or financial holding company.

Any liquidator appointed must carry out his or her functions under the direction and supervision of MDIC. Providing bilateral risk early-warning functions.


Banking regulation in Malaysia: overview

Show posts by this member only Bfia Banking regulation in Malaysia: What is the capital adequacy framework that applies for banks? Be designed to ensure that risk exposures and risk outcomes are adequately considered.

There must be a provision in the articles of association of the bank for the establishment of a Shariah committee. An approved representative office is only allowed under guidelines issued by Bank Negara Malaysia BNM on the Bafka and Operations of Representative Offices in Malaysia, to carry out certain permissible activities including, among others:. Bythe bank became technically insolvent and was bailed out by the Malaysian Finance Ministry Millman, p.

Malaysia Financial Law – Banking Law – BAFIA Act

The range of Islamic financial products offered in Malaysia includes:. Where a subsidiary of MDIC has been designated as a bridge bafiia, the designation expires two years after it is made unless extended or earlier terminated in accordance with the provisions of the MDICA. Financial regulatory, regulatory and compliance. Has a good credit rating by an abfia rating agency. What approval requirements apply to the acquisition of shareholdings and of control of banks?

Bank Negara Malaysia

DFIs are subject to the specific requirements of the BNM guidelines on capital framework, financial reporting, anti-money laundering and prudential limits bagia standards. In a nutshell, the author opines that such right of secrecy and confidentiality of a customer has been diluted by the abovementioned exceptions. There is no limit on the number of licences that can be issued, but there is understood to be currently a moratorium on the issuance of new banking licences by BNM.


The objectives are to further facilitate foreign exchange risk maoaysia, promote settlement of trade and investment in the ringgit and to enhance the depth and liquidity of onshore financial markets. The findings are as follows: Comprise directors who have the skills, knowledge and experience relevant to the responsibilities of the relevant board committee.

At present, the IFSA allows an international Islamic bank to be either a locally incorporated company or a branch registered with the Companies Commission of Malaysia, whereas Labuan banks must either be incorporated or registered under the Labuan Companies Act The duty of secrecy continues even after the termination of the banker and customer relationship.

The Act also includes money market oversight and foreign exchange administration matters. From 1 June Refining the foreign exchange administration notices by issuing a supplementary notice which slightly relaxes the rules on foreign exchange. Share on Track this topic Print this topic.

The board must maintain a board charter that sets out the mlaysia, responsibilities and procedures of the board and its committees, including the matters reserved for the board’s decision.

The Central Bank is empowered through enactment of legislation by the Parliament of Malaysia. Archived from the original on 20 February Interest in shares includes direct and effective interest under Schedule 3 of the FSA.