About PIDM (FAQs)

FAQ

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 Deposit Insurance System (DIS) aimed at protecting depositors.

Beginning 31 December 2010, PIDM’s role was 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 (MDIC).

A: PIDM’s membership comprises member banks and insurer members. All commercial banks licensed under the Financial Services Act (FSA) 2013 and all Islamic banks licensed under the Islamic Financial Services Act (IFSA) 2013, including locally incorporated subsidiaries of foreign banks operating in Malaysia, are member banks of PIDM. Insurer members are all takaful operators licensed under the Islamic Financial Services Act (IFSA) 2013 to conduct family and/or general takaful business in Malaysia, as well as insurance companies licensed under the Financial Services Act (FSA) 2013 to conduct life and/or general insurance business in Malaysia, including locally incorporated subsidiaries of foreign insurance companies operating in Malaysia.

A: Member banks and insurer members pay annual premiums and levies to PIDM. 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.

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 liable1;
  • provide incentives for sound risk management in the financial system; and
  • promote or contribute to the stability of the financial system2.
  • In achieving the objects under (1) and (2), PIDM shall act in such a manner as to minimise costs to the financial system.

A: PIDM complements the existing regulatory and supervisory framework by promoting incentives for member institutions to implement sound risk management practices.

PIDM is the resolution authority in Malaysia for member banks and insurer members. We have a range of legislative powers to intervene early in distressed member institutions to mitigate the possibility of a member institution failure. Failure in this context refers to when the member bank is no longer viable or becomes bankrupt. If necessary, once a member institution is deemed no longer viable by Bank Negara Malaysia, PIDM can assume control over the institution or take such intervention action to resolve the member institution in a manner that minimises costs to the financial system.

A: Bank Negara Malaysia is the primary supervisor and regulator of the financial system, and is responsible for maintaining the stability of the financial system. PIDM complements Bank Negara Malaysia's role and contributes to stability of the system by managing the Deposit Insurance System (DIS) and Takaful and Insurance Benefits Protection System (TIPS) in a manner that encourages prudent risk management among the member institutions.

A: PIDM is governed by Board of Directors appointed by the Minister of Finance from both the public and private sectors. A non-executive Chairman heads the Board while other representatives are the Governor of Bank Negara Malaysia, the Secretary General of Treasury, directors from the public sector, and directors from the private sector with relevant banking and financial sector experience.

A: Institutions that are not member banks of PIDM include:
  • Investment banks
  • Overseas branches of member banks
  • Development financial institutions and cooperative banks
  • 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 Bank Negara Malaysia

A: Institutions that are not insurer members of PIDM include:
  • Reinsurance companies and retakaful operators
  • International takaful operators licensed under the Islamic Financial Services Act (IFSA) 2013
  • Financial guarantee insurers such as Danajamin Nasional Berhad
  • Offshore insurance companies
  • Other players in the insurance industry, such as insurance brokers and adjusters

A: Member institutions must pay annual premiums and levies to fund the Deposit Insurance System (DIS) and Takaful and Insurance Benefits Protection System (TIPS), as well as adhere to the terms and conditions of membership prescribed by PIDM.

A: Membership is perpetual unless terminated by PIDM. PIDM may, with the approval of the Minister of Finance, terminate membership if Bank Negara Malaysia 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.

A: PIDM will cancel the membership if a member institution’s licence has been revoked by Bank Negara Malaysia or if the member institution has surrendered its licence to Bank Negara Malaysia.

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: info@pidm.gov.my