According to The Edge:
PUTRAJAYA: The government has eased foreign shareholding for all players in Islamic banking, investment banking, takaful and insurance players from 49% to 70%, said Prime Minister Datuk Seri Najib Razak.
While there is no change of foreign ownership in commercial banks which was retained at 30%, locally incorporated foreign commercial banks would be allowed to establish four new full-fledged branches in 2011 and 10 new micro-finance branches this year.
Najib, who is also Finance Minister, said on April 27, the government would issue up to nine banking licences from 2009 to 2012, of which two are for Islamic banking, with paid-up of US$1 billion, to be issued this year.
He added that up to two new conventional banking licences would be issued this year to foreign players with special expertise and invitations would be sent out today.
Up to two new family takaful licences would be also issued this year.
The remaining three are new commercial banking licences to be issued in 2011 to world-class players which could give value proposition to Malaysia.
Below are the highlights of the financial services liberalisation, according to Bank Negara:
(i) Up to two new Islamic banking licences to be offered in 2009 to foreign players to establish new Islamic banks with paid-up capital of at least US$1 billion to enhance global interlinkages, leverage on global developments in Islamic finance and reinforce Malaysia’s position as an international Islamic financial hub;
(ii) Up to two new commercial banking licences will be offered in 2009 to foreign players that will bring in specialised expertise to address gaps in the financial sector and spur the development of targeted economic sectors;
(iii) Up to three new commercial banking licences will be offered in 2011 to world-class banks that can offer significant value propositions to Malaysia;
(iv) Up to two new family takaful licences will be granted in 2009 to players that can offer significant value proposition to Malaysia to spur the development of the takaful industry and reinforce Malaysia’s position as an international Islamic financial hub.
(v) With immediate effect, existing domestic Islamic banks that wish to scale up their operations and expand into global markets are given greater flexibility to enter into strategic partnerships with foreign players through an increased foreign equity limit of up to 70%. These banks will be required to maintain a paid-up capital of at least USD1 billion;
(vi) With immediate effect, investment banks are given flexibility to enter into foreign strategic partnerships to enhance international linkages and business opportunities. In this regard, the foreign equity participation in investment banks will be increased to a limit of up to 70%;
(vii) With immediate effect, to further strengthen the resilience and competitiveness of the insurance and takaful industry, insurance companies and takaful operators are given greater flexibility to tie-up with foreign partners. Accordingly, the foreign equity participation in insurance companies and takaful operators will be increased to a limit of up to 70%;
(viii) A higher foreign equity limit beyond 70% for insurance companies will be considered on a case-by-case basis for players who can facilitate consolidation and rationalisation of the insurance industry. Existing foreign insurers that participate in the process will be accorded flexibility in meeting the divestment requirement.
(ix) To enhance the opportunity for locally-incorporated foreign commercial banks to increase their potential to provide financial services to the underserved sectors of the economy, with immediate effect, locally-incorporated foreign commercial banks can establish up to ten microfinance branches. Further branches will be considered based on the effectiveness of these branches in serving microenterprises;
(x) To promote greater financial inclusion and enhance the ability of the locally-incorporated foreign commercial banks to have a more effective intermediation role in the domestic economy, locally-incorporated foreign commercial banks in Malaysia will be allowed to establish up to four new branches in 2010 based on a distribution ratio of 1(market centre): 2(semi-urban): 1(non-urban);
(xi) With immediate effect, to improve insurance and takaful penetration in the country, locally-incorporated foreign insurance companies and takaful operators are allowed to establish branches nationwide without restriction;
(xii) With immediate effect, to enhance insurance and takaful penetration in the country, the restriction for locally-incorporated foreign insurance companies and takaful operators to enter into bancassurance / bancatakaful arrangements with banking institutions is now uplifted;
(xiii) With immediate effect, banking institutions, insurance companies and takaful operators will be accorded greater flexibility to employ specialist expatriates that have expertise to contribute to the development of the financial system in Malaysia; and
(xiv) To provide a more flexible operating business environment, offshore banking institutions licensed by the Labuan Offshore Financial Services Authority that meet the predetermined criteria will be accorded flexibility to have a physical presence onshore from 2010.
Similarly, offshore insurance companies licensed by the Labuan Offshore Financial Services Authority that meet the predetermined criteria will be accorded flexibility to have a physical presence onshore from 2011. This flexibility will be complemented by a strengthened regulatory and supervisory framework that will govern these players.