KUALA LUMPUR: Bank Negara Malaysia intends to implement the Net Stable Funding Ratio, the liquidity standard for banking institutions, on January 1 2019, a year later than expected.
This was due to uncertainty on the international front in terms of meeting the earlier timeline on January 1, 2018.
"We have considered the international nature of our banking institutions' operations and the impact on domestic competitiveness," said assistant governor Marzunisham Omar at a briefing on the NSFR exposure draft released today.
The NSFR is a liquidity standard which forms part of the Basel III regulatory reforms.
It requires banks to maintain a stable funding profile with regards to their assets and off-balance sheet activities.
This standard complements the Liquidity Coverage Ratio or LCR which as been phased in since 2015.
The delay is not expected to affect the resilience of the Malaysian banking system.
"Supported by strong liquid asset buffers, more diversified funding profiles and robust liquidity risk management practices, banking institutions have sufficient safeguards in managing liquidity risk."
As at June 30, the LCR for the banking system stood at 141 per cent whilst the NFSR is estimated at above 100 per cent.
Banking institutions have two months to submit their feedback to the exposure draft.