Greater flexibility in bank foreign ownership

The government will provide greater flexibility in the financial sector
including foreign ownership as part of its liberalisation efforts in the
banking and financial sector, Prime Minister Datuk Seri Najib Tun Razak
said today.

Commenting on whether the government will decide on a
30 per cent foreign ownership of commercial banks, he said there would
be more openness and flexibility in the financial sector.

"There will be elements of flexibility in our decision and at the same time for foreign banks in special niche areas.
"There
are certain banks that are not really competing with local banks and
they have certain functions to perform in niche areas, in which case,
special consideration can be made for that," he told reporters after
launching the Financial Sector Blueprint and Malaysia’s New Currency
Series in Kuala Lumpur today.

Najib, who is also the Finance
Minister said the government would also consider on the basis of merit
of each case. He said the two major criteria looked at would be the
prudential aspect of the banks and what these foreign financial players
could contribute to the Malaysian economy.






On the internationalisation of ringgit, Najib said Malaysia was not
ready to do that and that it was comfortable with its current position
especially with the current instability of the international foreign
exchange market.

"We have to develop our foreign exchange market
first in a very comprehensive manner. We also realise that this is
probably not the best time to do it," he said.

On whether there
had been recommendations on the consolidation of local banks, the prime
minister said there was no specific consideration under the financial
blueprint.

"No specific consideration but the market is flexible.
In other words, the dynamism of the market must be taken into account.
Sometimes, there will be a proposal for amalgamation and so forth," he
added.

Najib said although there were 69 recommendations under
the blueprint, which would take a certain period of time before they are
all fully implemented, the government was determined to implement it
based on the success of the earlier financial masterplan.

When asked on the progress of the first mega Islamic bank, he said the announcement would be made at the appropriate time.
"I
don't know yet. We will see. We are putting everything together now.
When they meet all the conditions, especially on the shareholders fund
and all that," he said. -- Bernama