Revised risk assessment framework for banks

KUALA LUMPUR: Malaysia Deposit insurance Corp (PIDM) is revising the Differential Premium Systems (DPS) for the Deposit Insurance System, effective the 2018 assessment year, to introduce a new indicator in the funding profile of member banks.

Chief executive officer Rafiz Azuan Abdullah said the new indicator took into account various instruments which are considered as stable funds, in line with the monitoring and funding development.

“Member banks, which support their business with funds from deposits and debt instruments, will benefit from the loans to existing funds ratio, aside from the core fund composition indicator, which provides incentives for them through a highly stable funding source composition,” he said in a statement.

Rafiz said the assessment indicators under the revised DPS framework would be based on a member bank’s position on Dec 31, 2017.

The Malaysia Deposit Insurance Corp (Terms and Conditions of Membership) (Amendment) Regulations 2017 had been gazetted and enforced starting Nov 2, 2017.

The regulations outlined the duties and responsibilities of PIDM member institutions, which includes adherence to prudential and syariah standards, good record maintenance and reporting to PIDM, should there be instances which could affect their safety and position. — Bernama