Thursday, July 4, 2013

Latest Banking Industry News



BNM has announced the implementation of the FSA and IFSA effective July 2013.

While the scope of the new FSA and IFSA is now (July 2013) wider, the key highlights of the new FSA and IFSA include: permissible shareholding level, supervision of financial holding companies and supervision of non bank financial institutions.

Under the new FSA, restrictions on shareholding only apply to individuals with the cap maintained at 10% while the previous 20% shareholding restriction on non individuals no longer applies.

Despite concern that the new rules will impact the major individual shareholders of PBB, HL Bank and AMMB, interest in financial institutions acquired prior to the now (July 2013) repealed BAFIA 1989 will continue to be grandfathered and therefore exempted form the new rules under the FSA.

Under the new FSA, holding companies that own more than 50% of licensed financial institutions governed by BNM will also be subject to the supervision of the central bank.

Holding companies such as CIMB, RHB cap, AMMB, Affin, Alliance and even DRBHicom (which owns 60% of Bank Muamalat) will now be subject to the supervision of BNM.

This new provision will lead to nom bank entities such as MBSB being placed under the supervision of BNM going forward.

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