Malaysia

New Product Approval Requirements for Banks

Quek Sue Yian / Christopher Lee. (sue.yian.quek@wongpartners.com/christopher.lee@wongpartners.com). Wong & Partners,* Kuala Lumpur, Malaysia. *Correspondent law firm of Baker & McKenzie

On 1 April 2003, Bank Negara Malaysia (BNM) issued new guidelines that deal with the development by banks of new banking and financial products and services. The guidelines are a part of a larger initiative recommended by the Financial Sector Masterplan to adopt a regulatory laissez-faire viewpoint of “what is not prohibited is allowed.” It is hoped that these new guidelines will develop the banking sector and motivate greater innovation in banking products owing to the decrease in bureaucracy and greater clarity from a regulatory perspective as to what is allowed and what is not.