Malaysia raises capital requirements to push mergers: central bank also says monetary policy is unchanged as it reports rise in nonperforming loans

Article Abstract:

The Malaysian central bank has placed new rules on the minimum capitalization requirements for financial services institutions to shore up confidence in the country's financial institutions. Malaysia's banking industry is burdened by ever increasing non-performing loans, which as of Feb. 1998 reached 8.7% of total loans, compared to 6.8% in Dec. 1997. Malaysian central bank governor Tan Sri Ahmad Mohamed Don sent a directive to the country's 39 finance companies to find merger partners to comply with new regulations which require financial services companies to have a minimum capital funds of 300 mil ringgit by mid-1999 and 600 mil ringgit by the end of the year 2000.

Financial Services, Finance and Insurance, Banking industry, Financial services industry

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After storm, Bank Negara clarifies rules for lending

Article Abstract:

Bank Negara Malaysia, last April 8, 1997, made clarifications on additional exemptions to the restrictions which limit property lending to 20% of an institution's loan portfolio and investment lending to 15%. The previously announced restrictions, aimed at controling the country's speculative lending, have resulted in a 6.6% decline of Kuala Lumpur Stock Exchange's composite index. The clarifications, however, seem to have eased fears among investors as the index became stable at 1138.36 upon closing April 14, 1997.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Personal credit institutions, Security brokers and dealers, Nondepository Credit Intermediation, Lending Services, Securities and Commodity Contracts Intermediation and Brokerage, Loans Regulation, Securities & Investment Svcs, Economic aspects, Laws, regulations and rules, Central banks, Banking law, Loans, Investment services, Bank Negara Malaysia

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