Labuan Sub Divisions

Labuan is the main island of the Malaysian federal territory of Labuan. Labuan is best known as an offshore financial centre offering international financial and business services via Labuan INFC since 1990 as well as a tourist destination for nearby bruneians and scuba divers. The territory of Labuan Is subdivided into administrative districs:

• Kampung tanjung aru
• kampung Sungai Labu
• Kampung sungai Pagar
• Kampung Sungai Bedaun
• Kiamsam
• Kampung Pohon Batu
• Kampung Patau-Patau I&II
• Batu Arang
• Batu Manikar
• Bandar Labuan
• Layang-Layangan
• Lubok temiang
• Rancha-Rancha
• kampung Tanjong Kubong
• Kampung Bukit Kalam

Domestic and International Banks of Kuala Lumpur (4th Part)

Bank Niagara’s financial stability surveillance framework is aimed at preserving the stability, safety and soundness of the financial system with a view to ensure its smooth functioning given its central role in the economy and as a contributor of growth. This is performed through:

Risk mitigation/reduction approach that aims at enhancing further the resilience and tolerance of the system towards shocks and disturbances, or at minimizing the potential impact on overall stability. A holistic risk assessment approach that enables the early identification of potential risks and emerging vulnerabilities that could threaten financial stability; These threats could emanate in a direct and indirect manner from the interlinkages between the financial system and the real sector, increased integration with the external sectors either via the trade or investment channels, or due to growing capital mobility as well as from payment and settlement channels. Monitoring and assessing the potential implications of developments and emerging trends in the domestic economy, external sector, corporate and household sectors on the financial system; Monitoring and assessing the potential implications of developments in sector-specific issues on the overall system wide stability i.e. the banking system, financial markets, insurance and takaful sectors and payment systems. IMPLEMENTATION PROGRESS: The macro surveillance process involves analysis and assessment of both quantitative and qualitative information using static and trend analyses, scenario and sensitivity analyses as well as forward looking analytical tools such as stress testing. Information is also obtained from the interactions and deliberations with economists, supervisors, financial institutions, market players, as well as other sources of market intelligence and information service providers. On the implementation of Basel II, the approach undertaken by Malaysia is based on the following four key principles: The need to accommodate capacity building efforts, with strong emphasis on gradual enhancement to risk management framework for all banking institutions; Adopting a flexible timeframe that allows capacity building measures to be implemented;

Putting emphasis on strong business justification instead of regulatory mandate for the adoption of Internal Rating Based (IRB) approaches; Putting in place an enhanced supervisory methodology to assess internal models and advanced risk management systems.

These principles have been translated into a two-phased implementation approach. The first phase will begin in January 2008 where all banking institutions will be required to adopt the Standardized Approach for credit risks and Basic Indicator Approach for operational risks. Banking institutions also have the option to adopt the Standardized Approach and the Alternative Standardized Approach for operational risk subject to Bank Negara Malaysia’s approval. In Phase I, Bank Negara Malaysia may also allow banking institutions to remain on the current accord if they intend to adopt the IRB approach, instead of the Standardized Approach. Banking institutions intending to adopt the IRB approach will be allowed to do so by January 2010. This is when the second phase of implementation will commence. Banking institutions intending to migrate directly to the IRB approach in 2010 would be required to obtain Bank Negara Malaysia’s approval. Preparations are on track towards implementing Basel II from 1 January 2008 for the Standardized Approach for credit risk and the Basic Indicator, Standardized and Alternative Standardized Approaches for operational risk. In general, banking institutions adopting the standardized approaches for credit and operational risk are already in the final stages of preparation. The necessary policies, processes and infrastructure for a transition to the new capital framework in 2008 have been mostly been put in place. Banking institutions adopting the IRB approach are at varying stages of development. Substantial progress has been made in developing framework on internal ratings and scoring models for borrowers, especially for banking institutions that plan to migrate directly to the IRB approach in 2010.

ADDITIONAL ASSESSMENT AND RESOURCES: The Director General, where it appears to him that a person chargeable with the tax has been guilty of any form of fraud or willful default in connection with or in relation to the tax, may at any time make an assessment in respect of that person for the purpose of making good any loss of the tax attributable to the fraud or willful default. The Director General, where in respect of any year of assessment it appears to him that no or no sufficient assessment has been made on a person chargeable with the tax, may within six years after the end of that year of assessment make on that person whatever assessment or additional assessment he considers to be appropriate.

Domestic and International Banks In Kuala Lumpur (3rd Part)

Bank Negara’s approach towards the supervision of banking institutions entails having greater emphasis on the early identification of emerging risks and system-wide issues, vigilant monitoring of the financial system as well as having an efficient financial infrastructure and reliable financial safety nets. In January 2007, Bank Negara Malaysia embarked on a new supervisory framework, the Risk Based Supervisory Framework (RBSF) to replace the existing frameworks which were used for different types of institutions in the Malaysian financial sector. The RBSF has been implemented to provide a systematic and effective process to assess the safety and soundness of a banking institution and focuses on the assessment of banking institution’s material risk exposures and the quality of its overall risk management system. In assessing the risk profile of a banking institution, Bank Negara Malaysia will undertake an analysis based on institution-specific, environmental and sectoral factors, and will continuously be on the lookout for any significant events that may have adverse implications on the banking institution’s risk profile.

On-site examinations are conducted to validate risk assessments of banking institutions, to better understand the quality of risk management system, to fill any information gaps and follow-up on supervisory issues which have been raised. Regular dialogues and consultations are held with institutions and the banking institutions are also encouraged to proactively report to Bank Negara Malaysia on any changes in its risk profile. The RBSF has also called for greater reliance on internal auditors and external parties such as external auditors and actuaries. In order to ensure greater responsibility and accountability on the part of the external parties, industry dialogues were conducted to highlight the supervisory expectations on these external parties. As the RBSF involves the exercise of sound judgment throughout the supervisory rating process, a Quality Assurance Framework (QAF) had been established to ensure a degree of consistency in the rating assessment across all Bank Negara Malaysia’s supervised institutions. In addition, with the transformation of the domestic financial landscape involving greater cross-market and cross-industry integration and consolidation, supervisory co-operation between Bank Negara Malaysia and other regulatory agencies locally and internationally also been strengthened and enhanced to provide a holistic assessment of the financial groups. The increased complexity in banking activities, emergence of new risk factors and continuous change in the financial landscape has also resulted in the establishment of the specialized risk units, namely credit risk, market risk and operational risk units in Bank Negara Malaysia. These units which are equipped with subject matter expertise aim to provide integral support to the supervisory and regulatory functions of Bank Negara Malaysia.

Domestic and International Banks of Kuala Lumpur (Second Part)

The banking system, comprising commercial banks, investment banks, and Islamic banks, is the primary mobiliser of funds and the main source of financing to support economic activities in Malaysia. The non-bank financial intermediaries, comprising development financial institutions, provident and pension funds insurance companies, and takaful operators, complement the banking institutions in mobilizing savings and meeting the financial needs of the economy.

Banks, including Islamic banks, operate through a network of more than 2,200 branches across the country. Six Malaysian banking groups have presence in 18 countries through branches, representative offices, subsidiaries and joint ventures. There are also 21 foreign banks which maintain representative offices in Malaysia. They do not conduct normal banking business but provide liaison services and facilitate information exchange between business interests in Malaysia and their counterparts.

The introduction of the framework for investment banks in 2005 provided for the development of full-fledged investment banks through consolidation and rationalization between merchant banks, stock broking companies and discount houses. Investment banking activities mainly include capital raising activities such as underwriting, loans syndication and corporate financing, management advisory services, arranging for the issue and listing of shares, as well as investment portfolio management. The development of investment banks will enhance the capacity of financial institutions in Malaysia to better serve its corporate customers through a wider range of financial and advisory activities on par with the services provided by international investment banks.

Malaysia also has a comprehensive Islamic banking system. Presently, Malaysia has fifteen full-fledged Islamic banks, three of which are from the Middle East, providing a broad spectrum of financial products and services based on Shariah principles. At the same time, there are five conventional banks three of which are major foreign banks, offering Islamic banking products and services via the Islamic banking window set up. The entry of the three foreign Islamic banks enhances the competition and stimulates innovation among the Islamic banking players, and at the same time complements the Malaysian players in tapping into strategic growth areas such as investment banking and wealth management. In addition, these institutions also have plans to make Malaysia as their financial hub for this region.

In terms of product offering, more than 60 Islamic financial products and services are made available in the market. The emergence of new innovative products and financial instruments that incorporate globally accepted Shariah principles such as commodity murabahah deposits, Islamic profit rate swap, and musyarakah mutanaqisah home financing and sukuk musyarakah in the industry have further elevated the domestic Islamic financial sector to the next stage of advancement.

Malaysia has several development financial institutions (DFIs) that were set up with specific objectives to develop and promote strategic economic sectors, including the manufacturing and export sectors, small and medium enterprises (SMEs), as well as the agriculture, infrastructure and maritime sectors. These DFIs complement the banking institutions by providing an array of financial and non-financial services to support development of the strategic sectors. These include the provision of medium to long-term loans, equity capital, guarantees for loans and a range of supplementary financial and business advisory services. ‘Bank Perusahaan Kecil & Sederhana Malaysia Berhad' or the SME Bank, which was established in October 2005, offers financial products such as term loans and working capital including start-ups and SMEs in new growth areas, particularly to those in professional services, export-oriented activities and franchise businesses. Bank Pertanian Malaysia has recently been corporatised to Bank Pertanian Malaysia Berhad (Agrobank) in order to strengthen its role to be more effective in meeting the needs of the entire value chain of agricultural activities, including the agro-based industries.