Featured Product

    BNM Announces Regulatory Measures to Address Impact of COVID Outbreak

    March 27, 2020

    BNM announced a number of regulatory and supervisory measures to support banking institutions to assist individuals, small and medium-size enterprises (SMEs), and corporations to manage the impact of COVID-19 outbreak. These measures relate to deferment and restructuring of loans or financing facilities, liquidity conditions, capital and liquidity buffers, and extension of consultation periods. BNM also published a set of frequently asked questions (FAQs) to address public queries regarding the Loan or Financing Deferment Measure.

    Deferment and Restructuring of Loans or Financing Facilities

    To ease the cash flow of individuals and SMEs that are likely to be the most affected by COVID-19 outbreak, banking institutions will offer to defer all loan or financing repayments for six months, with effect from April 01, 2020. Individuals and SMEs that do not wish or need to avail of these facilities can continue with the current repayment structures. Banking institutions will also facilitate requests by corporations to defer or restructure their loans or financing repayments.

    Ample Liquidity Conditions

    During this period, the financial intermediation activity can be supported by sufficient liquidity in the banking system. BNM will continue to supply daily ringgit liquidity to banks via various tools under its open market operations, including the outright purchase of government securities, FX swaps, reverse repos, and the standing facility. BNM also took preemptive measures to boost liquidity through the recent reduction in Statutory Reserve Requirement (SRR) ratio by 100 basis points. 

    Additional Supervisory and Prudential Measures

    BNM reviewed its planned regulatory and supervisory activities in 2020 to ease compliance and operational burdens on banking institutions. 

    • Banking institutions may draw-down on the capital conservation buffer of 2.5%, operate below the minimum liquidity coverage ratio of 100%, and utilize the regulatory reserves that were set aside during periods of strong loan growth. BNM fully expects banking institutions to restore their buffers within a reasonable period after December 31, 2020.
    • The implementation of the net stable funding ratio will proceed as scheduled on July 01, 2020. However, the minimum net stable funding ratio will be lowered to 80% for now, although banking institutions will be required to comply with the requirement of 100% from September 30, 2021.
    • BNM will extend the timeline for all ongoing consultations on discussion papers and exposure drafts to June 30, 2020 and beyond. 
    • Flexibility will also be provided to banking institutions to meet timelines for regulatory submissions.

    Enhancements to Financing Facilities to Assist Affected SMEs

    BNM is enhancing the existing financing facilities under the BNM Fund for SMEs in the form of:

    • An increase in the allocation of the Special Relief Facility to provide relief assistance to more SMEs who are affected by the COVID-19 outbreak. The maximum financing rate is now lowered from 3.75% per annum to 3.50% per annum. The enhanced Special Relief Facility is available until December 31, 2020.
    • An increase in the allocation of the All Economic Sectors Facility to enhance access to financing for SMEs and to support growth, with the maximum financing rate being reduced from 8% per annum to 7% per annum.
    • Other facilities to SMEs, namely the Automation and Digitalization Facility and Micro Enterprises Facility.

    Program to Support the B40 Segment in Generating Sustainable Income and Achieve Financial Resilience

    To further facilitate access to funding and help build entrepreneurship capability among B40 micro-entrepreneurs, a social finance program will be introduced by participating Islamic banks in collaboration with some State Islamic Religious Councils and implementation partners. The program is designed to mobilize social finance contributions toward providing seed capital that is packaged with micro-financing for eligible micro-entrepreneurs to start and grow business to generate sustainable income.

     

    Related Links

    Keywords: Asia Pacific, Malaysia, Banking, COVID-19, SME, Capital Buffers, Liquidity Buffer, NSFR, FAQ, Islamic Banking, BNM

    Featured Experts
    Related Articles
    News

    UK Authorities Consult on Implementation of Basel 3.1 Standards

    The UK authorities have published consultations with respect to the Basel requirements for banks. The Prudential Regulation Authority (PRA) published the consultation paper CP16/22 on rules for the implementation of Basel 3.1 standards.

    November 30, 2022 WebPage Regulatory News
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    FSB and NGFS Publish Initial Findings from Climate Scenario Analyses

    The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.

    November 15, 2022 WebPage Regulatory News
    News

    FSB Issues Reports on NBFI and Liquidity in Government Bonds

    The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.

    November 14, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    EU Finalizes Rules Under Crowdfunding Service Providers Regulation

    The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.

    November 08, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8597