My bank is CLOSED by the Federal Banking Agency!

Bank failures are not common in Malaysia, but it is quite common elsewhere in the world. While the FDIC encourages us to be smart, Malaysia home loan will guide you through the process of bank failures, in case events like this happen in Malaysia. In Malaysia, PIDM is the player.

A bank failure is the closing of a bank by a federal or state banking regulatory agency. Generally, a bank is closed when it is unable to meet its obligations to depositors and others. We’re lucky to have survived the 1999 crisis when Indonesia, Korea, Philippines and Thailand were facing massive economical crisis back then – But the Malaysian government and society made a smart move to restore banks and things are getting better now. On the side of it, here are some banks during the 1998-1999 crisis that FAILED.

List of Failed Banks in Malaysia

History:
[1] The financial institution (bank) was recapitalized by either the central bank or an agency specifically created to address the crisis, and/or it required a liquidity injection from the monetary authority.
[2] The financial institution’s operations were temporarily suspended (“frozen”) by the government.
[3] The government closed the financial institution.
[4] The financial institution was absorbed or acquired by another financial institution.

  1. Oct-98 [1] AmBank Group MALAYSIA
  2. Jun-99 [4] Bank Bumiputra Malaysia Berhad MALAYSIA
  3. Nov-98 [1] BSN Commercial Bank (Malaysia) Berhad MALAYSIA
  4. Jun-97 [4] Chung Khiaw Bank (Malaysia) Bhd MALAYSIA
  5. Oct-98 [1] Oriental Bank Berhad MALAYSIA
  6. Nov-98 [1] RHB Bank Berhad MALAYSIA
  7. Nov-98 [1] Sabah Bank Berhad MALAYSIA
  8. Nov-98 [4] AMFB Holdings Berhad MALAYSIA
  9. Nov-98 [1] AMMB Holdings Berhad MALAYSIA
  10. Nov-98 [1] Arab-Malaysian Merchant Bank Berhad MALAYSIA
  11. Dec-99 [4] BSN Merchant Bank BHD MALAYSIA
  12. Jun-99 [4] Hock Hua Finance Berhad MALAYSIA
  13. Jan-99 [4] Multi-Purpose Finance Berhad MALAYSIA
  14. Jan-98 [4] RHB Finance Berhad MALAYSIA
  15. Nov-98 [1] Southern Investment Bank Berhad MALAYSIA
  16. 1999 [4] TA Enterprise Berhad MALAYSIA
  17. Nov-98 [1] United Merchant Group Bhd. MALAYSIA
  18. Nov-98 [1] Utama Merchant Bank Berhad MALAYSIA

PIDM (Perbadanan Insurans Deposit Malaysia) is another smart initiative by the Malaysian government to actually protect depositors in the event of a bank failure (as explained above). All types of depositor, whether businesses or individuals, are protected. The maximum limit of coverage under the PIDM Act is RM60,000 per depositor per member institution. This includes both the principal balance of a deposit and the interest/return. The RM60,000 limit provides for 95% of existing depositors to be protected in full. The Malaysian deposit insurance system provides separate coverage for conventional and Islamic deposits.

What type of deposits are eligible for protection?

  1. Current and Savings deposit
  2. Fixed Deposits
  3. Investment deposits
  4. Certified cheques and bank drafts drawn or made against a deposit account

What do you need to know about Insurance Deposit?

  1. Make sure your accounts do not exceed insurance limits
    When your bank exceeds deposit limits and the bank fails, a large portion of the money will probably be lost, due to financial restrictions, regulations and laws worldwide as it sees. Make sure your account does not exceed deposit limits, and you’ll be doing fine.
  2. If your bank is taken over by another bank (Southern Bank to CIMB, etc), you do not need to fill up any additional paperwork.
    During bank transfers, usually all paperwork, information and data will be temporarily stored by a federal banking regulatory agency, protected and transferred later. You do not need to fill up any additional forms during the transfer.
  3. In events of bank failures, access to your money may be temporarily restricted.
    ATM withdrawals will usually remain online. Your money usually can still be withdrawn, unless stated otherwise by the financial institution or federal banking authorities.
  4. If you have a loan from a failed bank, your loan terms will still be the same.
    At this time of bank failure, there will be many scams and fraudulent activities attacking your delicate position, offering you chances to regain your money or grow your rates or maybe even protect your money. Forget all these tricks, pay to the same address, same bank, same person, as every transaction of yours will be directed to the moving/takeover bank.
  5. Your savings account and certificate of deposit will continue to grow interest.
    During times like these, savings interest rates will usually be shaky (and news circulating around that rates will change, etc). Unless stated otherwise by the takeover bank or PIDM, the rates will not change.

The mortgage and financial consulting services are offered to you FREE of charge without any obligations. Kindly contact us or email to consultant@malaysialoan.com.my if you need any enquiry. Thank You.

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