By Aidila Razak
The six individuals who own more than 10 percent of banks will not be forced to sell down their stakes to comply with the yet-to-be-gazetted Financial Services Act 2012 (FSA), Bank Negara Malaysia (BNM) said.
Governor Zeti Akhtar Aziz said that the Act does not apply retroactively, and that the bankers had acquired their stakes even before the introduction of the Banking and Financial Institutions Act 1989 which will be replaced by the FSA.
“Those with existing stakes are safe. It is for new stakes that are taken up within the financial sectors,” she told reporters after presenting BNM’s annual report today.
Section 92 of the FSA said that maximum permissible holdings of financial institutions by an individual is 10 percent.
This sparked an uproar over a potential RM19.2 billion sell-down, involving owners of banks like AmBank, Public Bank, Hong Leong Bank, K&N Kenanga, HwangDBS and KAF Seagroatt & Campbell, where the controlling shareholders held a chunk of the companies stock.
There was also concerns that Section 92 could be open to abuse by the authorities.
The FSA also applies to insurers, but the Act allows for a five year transition for those who had acquired their stakes under the Insurance Act 1996 to comply with the 10 percent maximum holdings requirement.
The FSA and the Islamic Financial Services Act 2013 will replace the Bafia, the Insurance Act and four other Acts now governing the financial sector.
Meanwhile, Zeti said that the Act is likely to be enforced in “May or June” once the sector is ready to comply.
BNM was also asked if the requirement for insurers to obtain separate licenses for their life and general insurance segments would see a duplication of resources.
To this, assistant governor Jessica Chew, also present at the press conference said that this would encourage greater prudence.
“Life and general insurance are different in nature. It is prudent for them to be managed separately and held under two separate entities,” she said.
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