KUALA LUMPUR:  The Ministry of Finance has approved the issuance of a commercial bank licence to Industrial and Commercial Bank of China Ltd (ICBC), the largest commercial bank in China.

Bank Negara said on Friday, Nov 20, the approval follows a bilateral arrangement entered into between the China Banking Regulatory Commission and Bank Negara, and between both governments earlier this year.

"This licence is separate from the new commercial banking licences that will be issued under the liberalisation initiative that was announced on April 27," the central bank said.

Bank Negara said this licence was therefore part of a very limited number of banking licences that Malaysia may issue from time to time under a bilateral arrangement.

The pre-determined criteria applied for such bilateral arrangements include the level of trade and investment links, the extent of existing participation of the country in the Malaysian financial sector and the value it would add to the overall development of the Malaysian financial system and the economy.