Malaysia benefits from foreign banks' participation

KUALA LUMPUR (Dec 13): Foreign banks' participation in Malaysia's
financial system has yielded numerous benefits to the nation, including
contributing immensely to the domestic financial sector, the Dewan
Negara was told on Tuesday.

Deputy Minister of Finance Datuk Donald Lim Siang Chai said their
involvement have also enhanced investment linkages and increased
external trade.

He said foreign banks' presence has also paved the way for the inflow of specialised expertise needed by the country.

The banks have also brought in best practices and technology which
could contribute towards developing new and innovative products to meet
the financial sector's requirements, he said.

Consumers can also benefit from the products and world-class services rendered by the foreign banks, he said.

"Many of the foreign financial institutions have set base in Malaysia
many years ago besides being the pioneers during the formative years of
Malaysia's
financial system in the 19th century.

"Hence, foreign banks have interests in Malaysia's economy and have
contributed continuously to the country's various economic cycle," he
said when
replying to Senator Tunku Abdul Aziz Tunku Ibrahim during question-and-answer session.

Tunku Abdul Aziz wanted to know how many local and foreign banks are
operating in the country currently and the foreign banks' impact on
Malaysia's economy during an economic slowdown.

Lim said 34 local and 22 foreign banks are in Malaysia, with foreign
banks' assets accounting for about 22 per cent of the banking sector's
total assets.

The Deputy Minister also said Malaysia's regulatory framework for
foreign banks provided adequate protection to reduce the impact of
cross-border
transactions. - Bernama