APEC Alternative Remittance System Symposium, Tokyo

1
APEC Alternative Remittance System Symposium,
Tokyo Panel 7 Going the Extra Mile - The Role
of Government, Civil Society and NGOs 3 - 4 June
2004
2
Governing Laws

• Exchange Control Act 1953
• Payment System Act 2003

3
General Rules for Remittance

• No restrictions for payment of salaries, goods
  services , repatriation of capital, profits,
  dividends, interest, rental other revenue
  earned in Malaysia
• Only investment abroad above RM10,000 equivalent
  (USD2,632) by a resident requires prior approval
• Information to be provided to the Central Bank
  for remittance amount exceeding RM50,000
  equivalent (USD13,158)

4
Various Formal Remittance Channels
Commercial Banks
Banking Institutions
Islamic Banks
Non-Banking Institutions
National Saving Bank
Post Offices
5
Basic Principles for Remittance

• Malaysian remitting institution is the principal
  to any arrangement. Overseas party acts as the
  agent
• Exchange rate to be quoted by Malaysian remitting
  institution
• Comply with Anti-Money Laundering Act 2001
• Ultimate remittance through licensed banks

6
Efforts to Promote Efficient Cost Effective
Remittance

• Collaborative institutional mechanism with
  overseas banks
• Subscribing to systems of international
  remittance service providers
• Approved arrangement by central banks

7
Mechanism Remittance by Banking institutions
through collaborative Institutional Arrangement
Small Bank Branches
Head- quarters
Overseas bank
Non-resident Beneficiaries
Big Bank Branches
8
Mechanism Remittance Arrangement by Non-Banking
Institutions
Instruction/ information




Post Office
Malaysian Bank
Foreign Bank
International remittance service provider
Beneficiary of funds


Foreign other post office
Beneficiary of funds
National Saving Bank



Beneficiary of funds
Malaysian Bank
Foreign Bank
Instruction/ information
9
The Malaysia-Nepal Remittance Arrangement
(1) Nepalese company in Malaysia
Beneficiaries
Receivers account with specified bank
Counterpart/ company in Nepal
Companys agency banks
(4a)
(4b)
(4b)
(2)
Designated banks in Nepal
(3)
Designated banks in Malaysia
10

• Responsibility of counterpart/company in Nepal
• Disburse funds accordingly to beneficiaries
• Annual license renewal from Nepal Rastra Bank
• Provides bank guarantee to Nepal Rastra Bank
• Responsibility of Nepalese company in Malaysia
• Submit reports to Bank Negara Malaysia

11

• Benefits of Collaboration/Approved Arrangement
• Reduces cost of remittance
• Safe receipt of funds by overseas beneficiary
• Encourage remittance through formal/ approved
  system

12
Thank you