Bank Deposits Insurance to be Raised to RM250,000
(via Business Times)
From next year, the limit of bank deposits insured by Malaysia Deposit Insurance (PIDM) will be raised to RM250,000 per depositor per member bank from RM60,000 now.
Prime Minister Datuk Seri Najib Razak also announced yesterday a plan to introduce an explicit insurance compensation scheme (ICS) for insurance and takaful policyholders.
According to the Finance Ministry, it is the Prime Minister’s intention to implement a package of legislative initiatives aimed at enhancing financial consumer protection for Malaysians.
“The plan is for this package to be tabled in Parliament for debate and enactment before year-end,” the Finance Ministry said.
With the ICS, policyholders of insurance and takaful products will also enjoy a similar level of consumer protection provided by PIDM for depositors in the commercial and Islamic banks.
Since the temporary government deposit guarantee would lapse as scheduled at the end of this year, the enhanced protection package would continue to provide increased protection to depositors.
“With this new limit, 99 per cent of depositors will be protected in full,” the ministry said.
Chief executive officer of PIDM Jean Pierre Sabourin said at a media briefing in Kuala Lumpur said the RM250,000 limit was proposed based on a survey of member banks and took into consideration the expected growing wealth of Malaysians in the years ahead.
He said PIDM will be issuing the new deposit insurance information regulations to be effective in January 2011.
“The purpose of the regulations is to ensure depositors receive accurate, relevant and timely information on deposit insurance, limits and coverage,” he said.
On the ICS, Sabourin said the scheme is to protect policyholders from the loss of their policy claims or insured benefits in the unlikely event of a failure of an insurance or takaful company.
He said the establishment of the ICS was timely since the insurance has an important economic role.
Like in the Deposit Insurance System, PIDM will also collect annual levies or premiums from member insurance companies but it may also borrow or raise funds from the capital markets.