Banks face new funding rules

Above shows the cash sources of banks

KUALA LUMPUR: The implementation of Bank Negara’s new liquidity requirements called the net stable funding ratio (NSFR) beyond Jan 1, 2019 could potentially lead to higher funding costs, lower margins and higher lending rates.

The NSFR, which is aimed at banks having longer-term cash, has been pushed back by at least another year (no earlier than Jan 1, 2019) before implementation, following considerable uncertainty on the foreign front in terms of meeting the internationally agreed timeline of Jan 1, 2018.