Q: What is Perbadanan Insurans Deposit Malaysia (PIDM)?
A: PIDM is a Government agency established under Akta Perbadanan Insurans Deposit Malaysia (Malaysia Deposit Insurance Corporation Act). PIDM was set up in 2005 to administer the national deposit insurance system aimed at protecting depositors.
Beginning 31 December 2010, PIDM’s role has been expanded to administer the Takaful and Insurance Benefits Protection System (TIPS) to provide protection to owners of takaful certificates and insurance policies.
Within Malaysia, we are known as PIDM, being short for Perbadanan Insurans Deposit Malaysia. Internationally, we are also known as the Malaysia Deposit Insurance Corporation.
Q: Which institutions are members of PIDM?
A: PIDM’s membership comprises member banks and insurer members. All commercial banks licensed under the Banking and Financial Institutions Act 1989 and all Islamic banks licensed under the Islamic Banking Act 1983, including foreign banks operating in Malaysia, are member banks of PIDM. On the other hand, insurer members are all takaful operators licensed under the Takaful Act 1984 to conduct family and/or general takaful business in Malaysia, as well as insurance companies licensed under the Insurance Act 1996 to conduct life and/or general insurance business in Malaysia.
Q: Who pays for the premiums for the PIDM protection?
A: Your deposit-taking member (also known as member bank) or insurer member pays annual premiums to PIDM on your insured deposits placed with the bank or protected benefits with the insurer member. As a depositor or a takaful certificate/insurance policy owner, you need not pay any premium to PIDM to enjoy the protection provided by PIDM.
Q: What is PIDM’s mandate?
A: PIDM's statutory mandate is to:
- administer a deposit insurance system and a takaful and insurance benefits protection system
- provide insurance against the loss of part or all of deposits for which a deposit-taking member is liable and provide protection against the loss of part or all of takaful or insurance benefits for which an insurer member is liable;
- provide incentives for sound risk management in the financial system; and
- promote or contribute to the stability of the financial system in such a manner as to minimise costs to the financial system.
Q: For TIPS, which institutions are not insurer members?
A: Institutions that are not members of PIDM include:
- Reinsurance and retakaful companies
- Captive insurers and specialist insurers
- Offshore insurance companies
- International takaful operators licensed under the Takaful Act 1984
- Other players in the insurance industry, such as insurance brokers, insurance adjusters and insurance agents
Q: How does PIDM contribute to the stability of the financial system?
A: PIDM complements the existing regulatory and supervisory framework by promoting incentives for member institutions to implement sound risk management practices.
We are also empowered to intervene early to reduce or avert losses to the financial system, and we are armed with a wide range of legislative tools to deal with distressed member institutions. Our intervention and resolution powers enable us, among others, to acquire assets from member institutions or to provide financial assistance, where appropriate.
Q: For deposit insurance, which institutions are not member banks?
A: Institutions that are not members of PIDM include:
- Investment banks
- Overseas branches of domestic banking institutions
- Development financial institutions
- All non-bank financial intermediaries such as provident and pension funds, cooperative societies, housing credit institutions and building societies which are not supervised or regulated by BNM
Q: What is the difference between the role of Bank Negara Malaysia (BNM) and PIDM?
A: BNM is the primary supervisor and regulator of the financial system, and is responsible for maintaining the stability of the financial system. PIDM complements BNM's role and contributes to stability of the system by managing the deposit insurance system and TIPS in a manner that encourages prudent risk management in member institutions.
Q: What are the member institutions’ responsibilities?
A: Member institutions must pay annual premiums to fund the deposit insurance system and TIPS, as well as adhere to the terms and conditions of membership prescribed by PIDM.
Q: Who governs PIDM?
A: PIDM is governed by a Board of Directors appointed by the Minister of Finance from both the public and private sectors. The Board now has nine members as provided for in the PIDM Act. A non-executive Chairman heads the Board while other representatives are the Governor of Bank Negara Malaysia, the Secretary General of the Treasury, two other directors from the public sector, and four directors from the private sector with relevant banking and financial sector experience.
Q: What about termination of Membership?
A: Membership is perpetual unless terminated by PIDM. PIDM may, with the approval of the Minister of Finance, terminate membership if BNM declares that a member institution has become, or is about to become, insolvent. Terminated members cannot accept new deposits or sell any new takaful certificates or insurance policies.
Q: What about cancellation of Membership?
A: PIDM will cancel the membership if a member institution’s licence has been revoked by BNM or if the member institution has surrendered its licence to BNM.
Q: Who do I contact for further information?
A: Call PIDM's toll-free information line: 1-800-88-1266, available Mondays to Fridays from 8.30 am to 5.30 pm or email to: firstname.lastname@example.org