Developing A Vibrant Pension Industry By 2020

KUALA LUMPUR, Dec 21 (Bernama) -- Developing a vibrant private pension industry and enabling locally-incorporated foreign banking institutions to open more branches as well as conduct hire purchase business are among the recommendations under the new financial sector blueprint over the next 10 years. In making these recommendations, Bank Negara Malaysia (BNM or Malaysia's Central Bank) said developing a vibrant private pension industry would enhance Malaysia’s preparedness for retirement and old age. Themed "Strengthening Our Future," the blueprint, unveiled by Prime Minister and Finance Minister Najib Razak Wednesday, charts the direction of the financial system from 2011-2020 as Malaysia transitions towards becoming a high value-added and high-income economy. The central bank said it was also crucial to enhance the financial sector’s capability to support high value-added activities including the financial needs of innovative enterprises throughout the life cycle. This entails the offering of factoring and leasing by financial institutions and development financial institutions and developing expertise to support new growth areas such as green technology. On the private pension fund industry, BNM said efforts should be geared towards developing supporting infrastructure and regulatory framework for insurers and banks to develop pension in collaboration with the government. Restrictions on locally-incorporated foreign banking institutions would be gradually removed to establish non-branch delivery channels while insurers and takaful operators would be encouraged to offer insurance products through alternative delivery channels. The blueprint would also facilitate the setting up of new institutions with specialised expertise to provide risk capital financing. BNM said the blueprint would also encourage insurers and takaful operators to offer higher-end insurance products to complement the national health financing scheme and strategic tie-ups between domestic and foreign financial institutions with specialised expertise in medical and health insurance. It would also promote the development and offering of foreign currency products and services to meet the demands of businesses while qualified insurance companies would be given greater flexibility to underwrite surety bonds and provide credit guarantee insurance. In enhancing the provision of wealth management products and services, the blueprint calls for the streamlining of the dual licensing regime for financial advisers and financial planners. The central bank also recommends the promotion of Islamic fund and wealth management activities through the offering of innovative financial solutions in the blueprint. -- BERNAMA