KUALA LUMPUR, NOVEMBER 24, 2005 - Bank Negara Malaysia (BNM) is targeting to issue four new Takaful licences to the successful applicants by January next year, said governor, Tan Sri Dr Zeti Akhtar Aziz.

Zeti said that as of Oct 31 -- the deadline for submission of all applications -- there were many applications from both local and foreign financial institutions.

"Indeed, the interest shown is a reflection of the widespread recognition on the viability of Malaysia Takaful industry and the confidence in the growth prospect and opportunity that it accords going forward," she said.

"We will issue four new licences," she told reporters on the sidelines of the International Convention on Takaful and Retakaful entitled: Takaful in Malaysia -- Sharing 20 years of experience and the way forward.

Earlier in her opening remark, Zeti said foreign players would be allowed to take up to a 49 percent stake in a local takaful company, in line with the liberalisation that had taken place in the Islamic banking industry.

Zeti said such equity participation was expected to foster meaningful strategic alliances, while bringing international perspective and strengthening further the international linkages with the domestic takaful
market place.

"Indeed the potential to participate with foreign partners will open up significant opportunities, in particular to expand product offering," she said.

Hence, existing Takaful operators would therefore need to review their businesses and management strategies in line with the increased competitive element that are set to shape the takaful industry, she said.

She said the issuance of new licence to qualified entities with distinctive capabilities, would enhance the diversity of quality players.

"The bringing in of new players with strong capabilities in product development and prudent risk management into our financial system would hasten further expansion of the takaful industry," she said.

On other developments, she said the sales of Bank Negara Malaysia's five-year Islamic bond had been postponed to December this year as the major financial requirements of the government will be considered next month.

"The major consideration (to issue the bond) is the government's financing requirements (which) will be in December and (so) it will be in December."

She was asked on the reason for the delay of the bond sales, following reports that the central bank had on Wednesday announced that the sales, due at the end of November, had been deferred until December.