Kuala Lumpur, 19 June 2007: National deposit insurer Perbadanan Insurans Deposit Malaysia (PIDM) is seeking public feedback on draft regulations that are intended to ensure that the public receives accurate and timely information about deposit insurance from member institutions.
At the same time, PIDM is also seeking public views on proposed guidelines that would be used to determine which deposit products are insured under the deposit insurance system.
This initiative follows the release of two consultation papers today on the draft Regulations on the Provision of Information on Deposit Insurance and on the proposed Guidelines on the Criteria for Determining Insured Deposits.
“We are committed to ensure that the public receives accurate and timely information from member institutions on how deposit insurance protects depositors. Thus, the issuance of the regulations and guidelines is consistent with PIDM’s role as an integral part of the financial safety net to promote public confidence in the banking system. Individuals who make informed decisions in respect of their deposits have greater confidence in the banking system,” said Jean Pierre Sabourin, the Chief Executive Officer of PIDM.
With Regulations on the Provision of Information on Deposit Insurance, PIDM proposes to regulate the types of deposit insurance information that member institutions should provide to their customers. The types of disclosure on whether deposits are insured or not and related representations will also be regulated. Member institutions are all commercial and Islamic banks operating in Malaysia.
“With regard to insured deposit products, member institutions would be required to maintain a Register which should be displayed prominently and made available for public reference at all their offices. Depositors must also be informed, when they open a deposit account or purchase a deposit product, as to whether the product is insured or not and, in addition, a copy of PIDM’s information brochure would be provided at the same time,” said Sabourin.
For member institutions, PIDM’s proposed Guidelines on the Criteria for Determining Insured Deposits provide the criteria for identifying which deposit products qualify for insurance.
The proposed Guidelines together with the Regulations aim to provide certainty about which deposit products are or are not insured by PIDM. Hence, depositors would be in a better position to make informed decisions.
“The issuance of the consultation papers is part of our ongoing efforts to promote transparency and to engage the public in our policy making process. Earlier last month, we issued two other consultation papers on the Differential Premium Systems (DPS) framework and on the draft Regulations on the Terms and Conditions of Membership,” Mr. Sabourin noted.
All consultation papers issued are available on PIDM’s website (Download Section). Member institutions and the public are invited to submit written comments to PIDM on the consultation papers issued today by 31 July 2007.
PIDM will collate all the comments received and publish its responses, including any amendments to the draft Regulations and Guidelines, on its website. The Guidelines will come into operation by the end of September 2007 while the draft Regulations will come into force after the normal legislative process.
For more information about this press release, kindly contact :
S.Loganathan, General Manager, Communications and Public Affairs Division
(Tel : 03-2173 7455)
Zeti Zahariah Zainul, Manager, Communications and Public Affairs Division
(Tel : 03-2173 7457)
PIDM administers the Government-backed deposit insurance in Malaysia. We protect depositors – automatically – up to RM60,000 per depositor per member institution. For further information:
PIDM protects your deposits in the bank as well as your takaful and insurance benefits in the unlikely event of a failure of a member bank or a takaful operator / insurance company.