Financial Sector Master Plan

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|An Evaluation of Financial Sector Master Plan |

|(Banking Sector) |

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Introduction

Objectives

In March 1st, 2001 Bank Negara Malaysia (BNM) announced the Financial Sector Master Plan (FSMP) which was formulate with the objectives of improving efficiency, innovation, flexibility, resilience and dynamism in the banking system. The programme will focus mainly on building the capabilities of domestic banking institutions and increasing the incentive to improve performance. The programme started from 2001 and the overall implementation of recommendation would take at least eight to ten years until 2010. The programme is divided into three different phases, each phase with its own objectives and time period. Our group has chosen to analyse and study the topic on banking sector

The first phase focus on developing a core set of strong domestic banking institutions by strengthening the capability and capacity of domestic banking institutions. This will then create an environment where the best domestic banking institutions will merge, to build and enhance the financial infrastructure. The first phase was until 2004, the objectives has been accomplished as domestic banks were merged reducing twenty four domestic commercial banks to ten...