A review of the
Financial Institutions (FI) Act 1996 was undertaken during the
year which resulted in proposed changes to further improve the
supervisory framework of the Central Bank over the financial
system. To this effect, the proposed amendments of the Financial Institutions
Act 1996 cover two main areas:
- to extend the
supervisory role of the Central Bank to cover operations of
the non- bank persons and financial institutions with the
approval of the Minister; and
- to provide more
room for the commercial banks to accommodate large financial
proposals above their maximum limits as allowed under Section
12 of the Act
In essence, the
above amendments provide flexibility to improve market development
and financial innovations within the financial system.
Furthermore, it
provides an extended supervisory mechanism to ensure that
financial institutions adopt prudent and best management practices
to safeguard their operations against any inherent risks
The above
amendments have been submitted for Parliment's consideration
during its Sitting in early 2001.
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