Malaysia opens sector to foreign banks

Two foreign banks have been short-listed by the Malaysian Central Bank in their applications for new Islamic banking licenses. Malaysia's Deputy Finance Minister, Dr. Awang Adek Hussin, made the announcement after officiating at the Islamic Financial Planning and Wealth Management Conference in the capital, Kuala Lumpur.

As part of the financial sector liberalization in April, the government announced that up to two new Islamic banking licenses would be offered this year to foreign players to establish new Islamic banks with a paid-up capital of at least US $1 billion.

The aim is to enhance global linkages, leverage global developments in Islamic finance, and reinforce Malaysia's position as an international Islamic financial hub. Hussin declined to give further details concerning the two foreign banks.