Malaysia said yesterday it would let foreigners hold a majority stake in insurance companies and investment banks, while five more foreign banks would be allowed to operate by 2011 in major steps toward financial liberalization.
Prime Minister Najib Razak told reporters he would raise the foreign ownership cap in insurance companies and investment banks from 49 percent at present to 70 percent.
“These liberalization measures are in line with the government’s initiatives to promote structural change within the economy and diversify sources of growth to further drive economic expansion,” said Najib, who is also the finance minister.
“In enhancing our international linkages and taking the financial sector to a new level of performance it will contribute to our overall economy,” he said.
Najib said the government would issue licenses to five new foreign commercial banks, which are the traditional lenders serving the public, by 2011. There are currently 13 locally incorporated commercial banks, including Citibank, Standard Chartered and HSBC.
Although they are fully owned by foreign entities, they are restricted in their operations and can only run a certain number of branches. Still, the foreign banks control 25 percent of the domestic banking market.
The foreign banks are also not allowed to own more than 30 percent of domestic commercial banks. Najib said this rule would remain unchanged to allow the local financial services sector to flourish.
He said the government would issue six new licenses to foreign financial institutions this year and three in 2011. Of the six licenses, two will be given to foreign Islamic banks with a paid-up capital of at least US$1 billion, two to foreign commercial banks with specialized expertise and two to Islamic family insurance firms.
In 2011, up to three licenses will be issued to world-class foreign commercial banks, he said.
“Our liberalization is a sequence-managed and gradual process,” central bank Governor Zeti Akhtar Aziz said.
Analysts hailed the measures, saying they would boost investment in Malaysia’s banking sector once the global economy improves and cement Malaysia as an Islamic financial hub.
“It’s definitely a step in the right direction and should help the government reorient the economy toward services,” said Philip McNicholas, an economist with research firm IDEAglobal in Singapore.
The financial services sector contributed 11 percent to Malaysia’s GDP last year and employs more than 140,000 workers.
Yesterday’s announcement came less than a week after Najib scrapped a 30 percent requirement for ethnic Malay ownership of investments in some service sectors in a bid to boost the country’s flagging economy.
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
CELEBRATION: The PRC turned 75 on Oct. 1, but the Republic of China is older. The PRC could never be the homeland of the people of the ROC, Lai said The People’s Republic of China (PRC) could not be the “motherland” of the people of the Republic of China (ROC), President William Lai (賴清德) said yesterday. Lai made the remarks in a speech at a Double Ten National Day gala in Taipei, which is part of National Day celebrations that are to culminate in a fireworks display in Yunlin County on Thursday night next week. Lai wished the country a happy birthday and called on attendees to enjoy the performances and activities while keeping in mind that the ROC is a sovereign and independent nation. He appealed for everyone to always love their
‘EXTREME PRESSURE’: Beijing’s goal is to ‘force Taiwan to make mistakes,’ Admiral Tang Hua said, adding that mishaps could serve as ‘excuses’ for launching a blockade China’s authoritarian expansionism threatens not only Taiwan, but the rules-based international order, the navy said yesterday, after its top commander said in an interview that the Chinese People’s Liberation Army (PLA) could blockade the nation at will. The object of Beijing’s expansionist activities is not limited to Taiwan and its use of pressure is not confined to specific political groups or people, the navy said in a statement. China utilizes a mixture of cognitive warfare and “gray zone” military activities to pressure Taiwan, the navy said, adding that PLA sea and air forces are compressing the nation’s defensive depth. The navy continues to
MISSILE MISSION: The Chungshan Institute of Science and Technology said it does not make policy, but would be glad to obtain certification to assemble the missiles The Ministry of National Defense-affiliated Chungshan Institute of Science and Technology is in the process of getting certified to assemble an additional 1,985 Stinger missiles on top of those from US arms sales, a senior defense official said yesterday. Washington is to send a team to Taiwan to evaluate the institute’s manufacturing capabilities and information security, said the official, who commented on condition of anonymity. The ministry initially bought 500 missiles for the army and navy, but later increased the order to 2,485 in response to an increase in Beijing’s military activities around the nation, and to meet the army’s urgent need
RSS