Guidelines on Credit Transactions and Exposures with Connected Parties

The revised “Guidelines on Credit Transactions and Exposures with Connected Parties” (the Guidelines) seek to provide greater flexibility for Licensed Institutions (LIs) to extend credit and make investments in the ordinary course of business to/in connected parties which are of good credit standing, while ensuring that connected parties, by virtue of their position that could potentially exert influence over an LI, do not inappropriately benefit from such transactions to the detriment of the LI.

The Guidelines set out the broad parameters and conditions relating to the conduct of such transactions (hereafter referred to as credit transactions) with connected parties to ensure an appropriate level of prudence. They also outline the roles and responsibilities expected of the management and the Board of Directors.

This document belongs to Bank Negara Malaysia (BNM). Full access to the original source is available here: https://www.bnm.gov.my/banking-islamic-banking