Negara Malaysia is the central bank and is responsible for supervising
the banking system. It also issues the Malaysian currency, acts as
banker and financial adviser to the government, administers foreign
exchange control regulations and is the lender to the banking system
as a last resort.
In Malaysia, 37 licensed commercial banks operate
through a total of 1,340 branches, while representative offices have
been established by 37 foreign banks. These representative offices
are not permitted to conduct normal banking business.
A wide range of merchant banking services are provided by 12 merchant
banks, many of which have affiliations with merchant banks established
Other banks include an Islamic bank which provides all the usual banking
services, based on Islamic concepts of banking and credit. Bank Islam
Malaysia has 68 branches in the country.
40 finance companies operate throughout 896 branches which accept
retail deposits and provide finance for installment (hire-purchase)
and leasing transactions and housing loans.
The services of these finance companies are supplemented by 156 registered
The banking system (comprising the commercial banks, merchant banks
and finance companies) and the industrial finance institutions are
the major institutional sources of credit to the industrial sector
in Malaysia. The industrial finance institutions in the country comprises
of Malaysian Industrial Development Finance Berhad (MIDF) and its
subsidiary, Malaysian Industrial Estates Sendirian Berhad (MIEL),
Bank Pembangunan Malaysia Berhad, Bank Industry Malaysia Berhad, Sabah
Development Bank Berhad, Borneo Development Corporation (Sabah) and
Borneo Development Corporation (Sarawak).
Seven discount houses in Malaysia accept short-term funds. They are
only permitted to invest the funds in treasury bills, government securities,
bankers' acceptances, and negotiable certificates of deposit. There
are also 12 factoring companies offering facilities to factor receivable.
The Export-import Bank of Malaysia (Exim Bank) was established in
August 1995 for the purpose of financing and facilitating Malaysia's
foreign trade and investments. It concentrates on providing medium
to long-term credit to Malaysian exporters and investors as well as
buyers of Malaysian goods.
Another institution, Malaysia Export Credit Insurance Berhad (MECIB),
offers export insurance cover and guarantees.