Bank Negara Malaysia (BNM) is seeking the public’s feedback on the draft bill to amend the Development Financial Institutions Act 2002 (DFIA).  Members of the public, industry players, intermediaries and related stakeholders are welcomed to provide their feedback on the draft bill.

The objective of the amendment to the DFIA is to further strengthen the development financial institutions’ (DFI) capacity and capability given the rapidly changing financial and operating environment. This is to ensure that the DFIs will continue to provide financing support to the strategic sectors which are mandated by the government, in particular providing financing to the SMEs and micro businesses.  

Proposed Amendments

The amendments will focus on further strengthening the risk management practices of the DFIs. The governance process is enhanced with the board and senior management assuming greater responsibility and accountability. The Board will also play a greater oversight role in providing strategic direction to the DFIs.

The amendments will also further elevate the level of consumer protection and transparency. Customers of the DFIs are accorded the required protection and the level of transparency for financial products and services, as those of the banking institutions. The amendments would also ensure that DFI’s business conduct when dealing with its customers is fair, responsible and professional.

The amendment also proposes for the inclusion of Shariah requirements to guide DFIs that conduct Islamic business activities. A comprehensive penalty framework will also be incorporated to allow efficient enforcement tools in addressing non-compliance effectively.

                                                                                                                     
Feedback from the public and various stakeholders

Members of the public, industry players, intermediaries and related stakeholders are encouraged to provide written feedback on the draft bill. The draft bill can be downloaded from BNM’s website at www.bnm.gov.my.  The deadline for the submission of feedback and comments is by 14 November 2014. 

All feedback can be submitted to the email address as below: [email protected]

Attachment I :  Summary Table
Attachment II : Draft Bill on Development Financial Institutions Act 2002

Bank Negara Malaysia
15 October 2014
                                                               

About the Development Financial Institutions Act 2002 (DFIA) 

DFIA is a regulatory framework which aims to promote safe and sound management of development financial institutions (DFIs). In particular, it aims to ensure effective and efficient implementation of mandated roles, consistent with the Government’s national objectives. DFIs are specialised financial institutions established by the Government as part of an overall strategy to develop and promote specific strategic sectors, such as agriculture, small and medium enterprises (SMEs), infrastructure development, shipping and capital-intensive and high technology industries for the social and economic development of the country.

Currently, the DFIs under the purview of BNM are Bank Pembangunan Malaysia Berhad, Small Medium Enterprise Development Bank Malaysia Berhad, Export-Import Bank of Malaysia Berhad, Bank Kerjasama Rakyat Malaysia Berhad, Bank Simpanan Nasional and Bank Pertanian Malaysia Berhad.