Malaysia has continued to liberalize its banking sector by issuing a commercial banking licence to Bank of Baroda, one of India’s largest banks. The new licence comes as Malaysia and India approach a Free Trade Agreement, hopefully by the end of this year.

“The Minister of Finance has approved the issuance of a commercial banking licence to a locally incorporated company to be established by Bank of Baroda (40 percent), Indian Overseas Bank (35 percent) and Andhra Bank (25 percent),” Bank Negara said in a statement.

New rules have been in place since April 2009 to make Malaysian banking more diverse and open to foreign interests, issuing nine new bank and insurance licences and easing foreign ownership limits for non commercial banks. Licences for 15 foreign owned commercial banks and six Islamic banks have been issued in total.

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