Financial

Table of Contents

Details | Page Numbers |

Abstract | 3 |

Introduction | 4 |

The Development of Local Commercial Banks in Malaysia | 5 |

The Development of Local Islamic Banks in Malaysia | 7 |

The Development of Foreign Commercial Banks in Malaysia | 14 |

The Development of Foreign Islamic Banks in Malaysia | 16 |

The Financial Blueprint and Commercial Banking | 17 |

The prospects of Islamic Banking in the Near Future in Malaysia | 22 |

Conclusion | 25 |

References | 26 |

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1. Abstract

This study investigates the development of local and foreign (commercial banks) conventional and Islamic banks in Malaysia for more than past ten years. From this we can see the growth of both types of banks. Besides that, from this we can see that even during crisis Islamic banks was stable compared to conventional banks. In addition, we analysed how Financial Blueprint will impact commercial banks in the next ten years. Furthermore, the prospects of Islamic banking in the near future in Islamic banking in Malaysia are towards global integration and international acceptances.

2. Introduction

The Malaysian financial system is divided into two main groups which are Financial Institution and Financial Market. The Financial Institution consists of Banking System and Non-bank Financial Intermediaries. However our focus is on Banking System. Under banking system there are Bank Negara Malaysia (Central Bank of Malaysia), Banking Institutions (commercial banks, finance companies, merchant banks and Islamic banks and a diverse group (discount houses and representative offices of foreign banks). The largest part of financial system is the banking system which accounts 67% of the total assets in financial system. Presently there are 27 commercial banks (excluding Islamic banks) of which 8 are local commercial banks. The main roles of commercial banks are to supply retail banking services for instance granting loans. Besides that, treasury...