KUALA
LUMPUR: Malaysian Prime Minister Najib
Razak on Tuesday urged Indonesia not to lower the foreign equity ownership
ceiling for its banking institutions.
Speaking
at an investors conference in Kuala Lumpur, Mr Najib said the proposed move to
limit foreign shareholding in Indonesian banks and financial institutions to
not more than 50 per cent was regressive and would undermine ASEAN's
integration process.
"I
don't like seeing ASEAN countries changing rules. ... If they do that, other
coutnries will do the same and retaliate and that's going to undermine ASEAN
integration," he said.
Two of
Malaysia's largest banking groups, Maybank and CIMB - with interests spanning
across Indonesia - have also expressed their concerns.
CEO of
Maybank Investment Bank Tengku Zafrul Aziz said the bank currently holds 99 per
cent of Maybank BII and 80 per cent of Maybank Kim Eng, both of which exceed
the proposed ownership ceiling.
Mr
Najib said Malaysia has been taking steps to further liberalise its financial
and banking sectors and the government would review its current 30 per cent cap
on foreign equity ownership for domestic banks.
However,
some industry players are warning that the banks may not be ready.
"Definitely,
opening for foreign competition is good but liberalising share holding
structure is another thing," Tengku Zafrul Aziz said.
"We
do want to see Malaysian banks strengthening their position in this region, if
not globally. But first, Malaysian banks must be able to compete on a level
playing field."
Malaysia
allows foreigners to own up to 75 per cent in investment and Islamic banking
institutions but has capped foreign equity ownership in other domestic banking
institutions at 30 per cent.
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CNA/wm
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