Financial Services Liberalisation

This document summarizes the Malaysian government's recent liberalization measures for the country's financial services sector. Key points include: 1) Allowing up to 7 new licenses for foreign commercial and Islamic banks, with 4 in 2009 and 3 in 2011 that can be wholly foreign owned. 2) Increasing the foreign equity limit for domestic insurance, takaful, and investment banks to 70% from 49% previously. 3) Providing greater operational flexibility for foreign commercial banks, such as allowing microfinance branches and new regular branches. 4) The changes follow Malaysia's gradual "managed approach" to financial sector liberalization outlined in its 2001 Financial Sector Master Plan.