Malaysia's top bank to operate in China

Malaysia's top bank to operate in China

KUALA LUMPUR (AFP): Top bank Malayan Banking Bhd. (Maybank) has become the first Malaysian bank to get a licence to operate in China, officials said on Thursday.

"Maybank has obtained a licence to establish a bank in Shanghai as part of an reciprocal arrangement for the reinstatement of Bank of China in Kuala Lumpur," a Chinese embassy economic official told AFP.

She declined to elaborate.

Banking officials said Maybank would be the first local bank to enter China and the move would further spur trading and investment ties.

Maybank, which already has a representative office in Beijing, declined to comment.

This week Malaysia's central bank said the state-owned Bank of China would be allowed to resume operations in Malaysia after a 41-year break.

"With the re-establishment of BoC in Malaysia, it is hoped that bilateral and trade ties between Malaysia and the People's Republic of China would be further enhanced," Bank Negara Malaysia said.

It said the Bank of China's licence to resume operations from August 1 was granted "under special circumstances."

The Chinese bank began operating in then-Malaya shortly before World War II but was closed down under a 1958 law which banned banks controlled by a foreign government. The prohibition was repealed in 1996.

Business Times said the Bank of China's local operations were shut down in 1959 in an apparent move to stop it being used to fund the communist insurgency.

It said the Chinese bank was expected to offer a complete range of services ranging from trade financing to commercial loans, along with deposit and savings account services.

Maybank already has 30 overseas branches, 22 of them in Singapore. It also has a presence through subsidiaries in Indonesia, Papua New Guinea and the Philippines.

Maybank Philippines Inc. operates 60 branches throughout the country.