The Ministry of Finance (MOF) is the federal government department charged with overseeing government expenditure and revenue. The ministry also develops economic policy and prepares the federal budget. The following are some of the key responsibilities of the ministry. The first one is to make sure that the budget is balanced. The second is to ensure that there are enough tax revenues to pay for government spending.
The financial sector of Malaysia is dominated by investment banks, commercial banks and Islamic banks. There are 30 commercial banks in the country and eleven foreign-owned banks. The biggest banks in Malaysia are Maybank, CIMB, RHB, Bank Negara Malaysia and Public Bank. These banks are regularly inspected by Bank Negara Malaysia to ensure their soundness. Other financial service firms include insurance companies and brokerage firms.
The foreign exchange market in Malaysia is heavily regulated. For example, residents are prohibited from transferring RM to non-residents. They cannot sell foreign currency to other Malaysian residents and they cannot deal in ringgit assets without the Controller’s consent. But foreign investment is permitted and at least one U.S. bank has an operation in Malaysia: Bank of America, Citibank and J.P. Morgan Chase Bank. Those banks also have representative offices in Kuala Lumpur. There are also a number of local banks with correspondent relationships in the United States.
The development of technology has also impacted the finance sector in Malaysia. The country’s internet penetration rate has quadrupled in the last decade, and has reached 90 percent. The availability of affordable data has helped mobile banking services grow rapidly. According to the World Economic Forum’s 2019 Network Readiness Index, Malaysia is highly advanced in terms of financial technology. The most popular fintech in the country include digital payments, mobile wallets, and digital remittances. Another popular technology is blockchain.