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Wednesday, 15 August 2007

Malaysian banks to set up International Currency Business Units (ICBUs)

KUALA LUMPUR: Bank Negara Malaysia, the central bank, has decided to allow commercial and investment banks in the country to set up international currency business units (ICBUs) to undertake international currency business under Islamic finance in Malaysia. Previously, it had only opened applications to conduct Islamic banking business in international currencies under a division set-up at Malaysian Islamic banks licensed under the Islamic Banking Act 1983. "Commercial and investment banks licensed under the Banking and Financial Institutional Act 1989 are now allowed to establish ICBUs to carry out Islamic banking business under their existing entities," BNM Governor Zeti Akhtar Aziz said in a keynote address at the Second Malaysian Islamic Finance 2007 conference here yesterday. To date, eight financial institutions have been granted approval to set up ICBUs in Malaysia, Zeti said. "There is also positive response from the local and foreign institutions to establish international Islamic bank, international takaful (Islamic insurance) operator as well as ICBUs to undertake international currency business in Malaysia," she added. She said significant progress had been achieved in the development of the Malaysian sukuk (Islamic bond) market. "Malaysia accounted for about two-thirds of the global sukuk outstanding this year, amounting to about USD47 billion USD - (ET, 15 Aug 07)

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