Malaysia Financial System Case Study

1.1. Background of Malaysia Financial System

1.1.1. Malaysian Financial System can classify to two part: Financial Institution and Financial Market. Financial institution also including banking system and non-banking Financial Intermediaries, all financial institution regulate by central bank.

1.1.2. Banking system including commercial bank, investment bank, Discount House, Representative Office Of Foreign Bank and Offshore Bank. Most of the banking institution have taken over more than one banking system, for example in CIMB Group Berhad include CIMB Investment Bank, CIMB Bank, CIMB Islamic and others.

1.2. Importance of Bank

1.2.1. Bank is a very important role in develop country economic. Bank provides funds for current industry to operate

It was a branch of a British exchange bank called The Chartered Mercantile Bank of Indian, London and China. In July 1913, the first domestic bank incorporated, call Kwong Yik (Selangor) Banking Corporation. In 1917, branches of a Singapore bank incorporated branches in Melaka and Muar. After that, local or other country’s businessmen and traders incorporated more new indigenous banks in Malaysia. In 1959, World Bank Mission recommended to make a form of Central Bank. On January 26, 1959, Bank Negara Malaysia (BNM) have been created and BNM was under the Central Bank of Malaya Ordinance,

Identify the current banking structure and regulations

3.1. Banking Structure

3.1.1. Commercial Bank

These bank collect money from public and lend it back to them. Commercial bank are open to the public and serve individuals and institution. Commercial bank is a type of bank that most currently use. It regularity owned by a Banking Group. Commercial Bank in Malaysia include 8 local bank and 19 foreign bank. (Grimsley, n.d.)

3.1.1.1. Local bank in Malaysia has Affin Bank Berhad, Alliance Bank Malaysia Berhad, AmBank (M) Berhad, CIMB Bank Berhad, Hong Leong Bank Berhad, Malayan Banking Berhad, Public Bank Berhad RHB Bank Berhad. (Bank Negara Malaysia, 2013)

Figure 4: Logo of Affin Bank Berhad, Alliance Bank Malaysia Berhad, AmBank (M) Berhad, CIMB Bank Berhad, Hong Leong Bank Berhad, Malayan Banking Berhad, Public Bank Berhad RHB Bank Berhad

3.1.1.2. Foreign Bank in Malaysia has BNP Paribas Malaysia Berhad, Bangkok Bank Berhad, Bank of America Malaysia Berhad, Bank of China (Malaysia) Berhad, Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad, Citibank Berhad, Deutsche Bank (Malaysia) Berhad, HSBC Bank Malaysia Berhad, India International Bank (Malaysia) Berhad, Industrial and Commercial Bank of China (Malaysia) Berhad, J.P. Morgan Chase Bank Berhad, Mizuho Bank (Malaysia) Berhad, National Bank of Abu Dhabi Malaysia Berhad, OCBC Bank (Malaysia) Berhad, Standard Chartered Bank Malaysia Berhad, Sumitomo Mitsui Banking Corporation Malaysia Berhad, The Bank of Nove Scotia