Bank Negara issues 5 new commercial banking licences to foreign banks
PETALING JAYA: Bank Negara will issue five new commercial banking licences to foreign banks in line with the liberalisation of the sector, the central bank said.
The banks were BNP Paribas SA (France), Mizuho Corporate Bank (Japan), National Bank of Abu Dhabi (United Arab Emirates), PT Bank Mandiri (Persero) Tbk (Indonesia), and Sumitomo Mitsui Banking Corp (Japan), the central bank said in a statement yesterday.
The licences would be issued to the banks’ wholly-owned units.
The five newcomers will take the total commercial foreign banks in the country to 19, according to Bank Negara’s website.
The award of the new licences would “crowd” the banking sector in Malaysia, which also has nine local banks, Jupiter Securities head of research Pong Teng Siew said.
“It will increase competition but then I think that’s what Bank Negara wants – competition will raise the bar in terms of the quality provided,” he said.
For local banks, the new licences would “force” them to move overseas to seek “greener pastures”, Pong said.
The new commercial banks were expected to add to the diversity of the financial services industry, support the new areas of growth, including green technology, and facilitate the transformation of Malaysia’s economy towards achieving high value-added and high-income economy status, the central bank said.
Bank Negara said that following its April 27 announcement on the liberalisation of the sector, it had received “strong interest” from financial institutions to establish operations here.
The central bank said in assessing the applications, it had taken into consideration the financial strength, track record, expertise, business plan and potential contribution to the development of Malaysia’s financial sector.
It added that the presence of these banks would also further enhance Malaysia’s international linkages via facilitating international trade and investment flows between Malaysia and other parts of the world.
Last year, Bank Negara issued a banking licence to Industrial and Commercial Bank of China Ltd and this year, it awarded a new commercial banking licence to a consortium of Indian banks.