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Framework
International Islamic Bank Licenses

International Islamic banking licenses are offered to financial institutions wishing to conduct the full range of Islamic banking activities in non-ringgit foreign currency business under the Islamic Banking Act 1983.*
 
Eligibility

  • Well-established and reputable licensed financial institutions
  • The adoption of international banking practices formulated by the Bank for International Settlements (BIS) or any other international standard-setting body(ies)
  • Regulated and supervised by a competent home regulatory authority
  • Possesses a sound track record

 
An IIB may be established as an incorporated company or branch.

To operate as an incorporated entity, the requirements are:
·         A minimum paid-up capital of RM10milion
·         An annual licensing fee amounting to RM50,000
 
To operate as a branch entity, the requirements are:
·         A minimum net working fund of RM10million
·         An annual licensing fee amounting to RM50,000
 
*The IIB is a resident for the purpose of foreign exchange administration rules.
 

Scope of Business
Licenced International Islamic Banks (IIB) may conduct the full spectrum of international Islamic banking operations. These include: 
·         Commercial banking, including bancatakaful (bancassurance)
·         Investment banking
·         Other banking businesses in Malaysia, as may be specified by Bank Negara Malaysia (the Central Bank of Malaysia)
 

IIB Transacting with Residents
The IIB is allowed to transact with residents under the following conditions:

  • Maintain a foreign currency account for the resident to retain any foreign currency receipts other than export proceeds
  • Extend foreign currency credit facility to the resident other than trade financing facility involving export

 
IIB Transacting in Ringgit
The IIB is allowed to transact in ringgit in stipulation of the following conditions:

  • Holding ringgit instruments for investment purposes
  • Maintaining a ringgit account with any onshore Islamic Bank licensed under the Islamic Banking Act 1983
  • Maintaining an external account to facilitate ringgit investments by its non-resident customers