Kuala Lumpur: Malaysia's central bank has given a commercial bank license to Industrial and Commercial Bank of China, the largest commercial bank in China.
The license follows a bilateral arrangement entered into between the China Banking Regulatory Commission and Bank Negara Malaysia and between both governments, Bank Negara said in a statement yesterday.
"This is the first time Malaysia is giving a banking license under a bilateral agreement," central bank Governor Zeti Akhtar Aziz told reporters.
Prime Minister Najib Abdul Razak, also the finance minister, had announced in April that the government would award two new commercial banking licenses to foreign banks this year and three in 2011 as part of the liberalisation of the financial sector to attract more foreign investment.
Bank Negara, however, said granting of the license to ICBC is separate from Najib's April commitment.
"This license is therefore part of a very limited number of banking licenses that Malaysia may issue from time to time under a bilateral arrangement," the bank said, adding that the criteria include the level of trade and investment linkages.
There are currently 13 wholly foreign-owned commercial banks in the country with a market share of 25 percent. They include Bank of China, the first bank from mainland China to set up shop in Malaysia. ICBC would be the second.
Bureau Report
First Published: Saturday, November 21, 2009, 19:12