Kuala Lumpur, 12 May 2008: Perbadanan Insurans Deposit Malaysia (PIDM) is focusing its efforts to further enhance its operational readiness in exercising its powers in line with its mandate as the national deposit insurer.
Since its inception in 2005, PIDM has been building the necessary foundation to enable it to meet its mandate of protecting deposits in member banks and preparing for any possible intervention and resolution of troubled banks as well as payout to depositors in the event of a bank failure.
“We are now concentrating on building our capacity in areas such as intervention, resolution and payout. We will continue to enhance our corporate governance and enterprise risk management frameworks. We are taking advantage of the current strong and stable banking system to lay the groundwork in these areas so that we are fully prepared to carry out our mandate should there ever be a troubled bank,” said Jean Pierre Sabourin, Chief Executive Officer of PIDM at the presentation of the organisation’s Annual Report 2007. A copy of the Annual Report 2007 is available in its website (www.pidm.gov.my) in Bahasa Malaysia, English, Chinese and Tamil.
In 2008, PIDM is rolling out a number of regulations, applicable to its member banks that would further strengthen the deposit insurance system. Under the new Differential Premium Systems Regulations, premiums will be collected based on individual member banks’ risk profiles.
“Our efforts in the past years have been to create a robust and pragmatic deposit insurance system. One of our major achievement in 2007 is the coming into force of our Differential Premium Systems (DPS) in 2008. The DPS will reward banks whose risk profiles are low through reduced premiums and impose higher premiums on banks with higher risk profiles, and will create fairness in the premium assessment,” said Sabourin.
Depositors will also have certainty about how deposit insurance protects them when the Information Regulations come into force. Member banks will have to inform depositors about the insurability of deposit products and make available pertinent information about deposit insurance that will assist consumers in making informed financial decisions. This would further enhance transparency and effectiveness of the deposit insurance system.
In regards to PIDM’s financial position, its revenues for 2007 totalled RM115.7 million (RM110 million in premiums and RM5.7 million from investment income). Its operating expenses totalled RM27 million. As a result, PIDM’s net income for 2007 totalled RM89 million. This surplus and past accumulated surpluses now total RM211 million.
Its operational readiness also calls for PIDM to actively engage its stakeholders by creating and enhancing awareness about the deposit insurance system. Its active public awareness efforts have the objective of promoting confidence of the public in Malaysia’s financial systems which therefore contributes to financial system stability.
Last week, PIDM organized an awareness campaign in line with the International Deposit Insurance Week, during which it launched its 2008 advertising campaign and held briefings for member banks and the public.
“For a deposit insurance system to work, its stakeholders must understand how the system works. Fully informed depositors can make financial decisions that best meet their needs and their risk appetite,” elaborated Sabourin.
For more information about this press release, kindly contact :
S.Loganathan, General Manager, Communications and Public Affairs Division
(Tel : 03-2173 7455)
Zeti Zahariah Zainul, Manager, Communications and Public Affairs Division
(Tel : 03-2173 7457)
PIDM administers the Government-backed deposit insurance in Malaysia. We protect depositors – automatically – up to RM60,000 per depositor per member institution. For further information:
PIDM protects your deposits in the bank as well as your takaful and insurance benefits in the unlikely event of a failure of a member bank or a takaful operator / insurance company.