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KUALA LUMPUR : Malaysia's finance ministry has issued a commercial banking licence to China's largest bank, the country's central bank announced Friday.
The licence for the Industrial and Commercial Bank of China Limited (ICBC) follows the signing of an arrangement between the China Banking regulatory Commission and Bank Negara agreed to in the early part of the year, it said in a statement.
"This licence is separate from the new commercial banking licences that will be issued under the liberalisation initiative...(and) is therefore part of a very limited number of banking licences that Malaysia may issue from time to time under a bilateral arrangement."
The issuance of the licence comes a week after both central banks signed a deal to increase cooperation in banking supervision during a state visit to Malaysia by Chinese president Hu Jintao.
In April, Najib announced measures to liberalise the country's banking sector, allowing nine new banking and insurance licences and easing foreign ownership limits for non-commercial banks.
He said the move, which came shortly after Najib liberalised parts of the services sector, was aimed at making Malaysia more competitive amid the global downturn.
Malaysia has 13 locally incorporated foreign banks, including HSBC and Citibank, and three foreign Islamic banking operators. No new foreign commercial banks have won approval to operate here for more than a decade.
The banking and insurance industry represented 11 percent of Malaysia's GDP in 2008, compared with 9.2 percent in 2000, and employed 140,000 people.
- AFP /ls
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