KL liberalizes rules on banking, exchange control<\/p>\n
KUALA LUMPUR (AFP): Malaysia's central bank yesterday
\ndesignated seven of the country's largest banks to operate
\nforeign currency accounts for exporters in a significant move to
\nliberalize its exchange control rules.<\/p>\n
This also followed the decision by the central bank to allow
\nstronger, well-managed banking institutions to conduct new
\nactivities under a more liberal two-tier regulatory environment.<\/p>\n
Five Malaysian and two foreign-owned banks will from next
\nmonth allow exporters to maintain export proceeds in foreign
\ncurrency of up to an overnight balance of $5 million per
\nexporter.<\/p>\n
"The move to allow exporters to hold foreign exchange besides
\nthe central bank and commercial banks represents the first major
\nrevision of Malaysia's exchange control rules since 1987,"
\ncentral bank governor Ahmad Mohd Don said.<\/p>\n
The liberalization of Malaysia's exchange control rules was
\nfirst announced in the 1995 budget presented by Finance Minister
\nAnwar Ibrahim in parliament on October 28.<\/p>\n
Rules governing capital flows had to be changed in view of the
\nincreasing number of Malaysians now expanding businesses abroad
\nin a big way, officials of Bank Negara, the central bank, said.<\/p>\n
Previously, exporters had to repatriate proceeds in the form
\nof ringgit back to Malaysia within a specified period.<\/p>\n
Malayan Banking (Maybank), Bank Bumiputra Malaysia Bhd.,
\nPublic Bank Bhd., Bank of Commerce (M) Bhd., Development and
\nCommercial Bank Bhd. and foreign-owned Hongkong Bank Malaysia
\nBhd. and OCBC Bank (M) Bhd. have been designated for the purpose.<\/p>\n
Finance<\/p>\n
The seven banks were chosen based on their strong financial
\nbacking under the two-tier system, Ahmad said.<\/p>\n
"While the minimum capital requirement is set initially at 500
\nmillion ringgit (US$200 million) for the seven banks, they will
\nhave to raise their capital to at least one billion over a
\nspecified period of time," Ahmad said.<\/p>\n
Bank Negara announced in August plans to introduce its so-
\ncalled two-tier system to allow the better-managed and
\nfinancially-sound banks more freedom to undertake activities
\ntheir weaker counterparts were not permitted to do.<\/p>\n
The rest of the 30 commercial banks operating in Malaysia
\ncould graduate into "Tier-1" once they qualified, Ahmad said.
\nThe 12 merchant banks in the country may be classified in the
\nsame manner, he said.<\/p>\n
The seven "Tier-1" banks account for 54 percent of total
\nnumber of 1,248 bank branches in the country, 60 percent of total
\ndeposits and 58 percent of total loans.<\/p>\n
Explaining the 1995 budget proposals on the more relaxed rules
\non foreign currency borrowing, Ahmad said the threshold on
\nforeign loans requiring approval was now raised from the current
\nlevel of two million ringgit to five million ringgit.<\/p>\n
The aggregate limit of ringgit loans to foreigners for buying
\nproperty in Malaysia would also be raised to 200,000 ringgit from
\nthe present 100,000 ringgit, he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kl-liberalizes-rules-on-banking-exchange-control-1447893297",
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