KUALA LUMPUR (June 24): Bank Negara Malaysia (BNM) has issued three new policy documents for prescribed development financial institutions (DFIs), enhancing requirements on performance measurement, strategic planning and corporate governance.
The measures are aimed at improving the effectiveness, accountability and long-term sustainability of DFIs, while strengthening governance, transparency and alignment with national development goals.
The three policy documents, namely the Performance Measurement Framework (PMF), Corporate Strategic Plan (CSP) and Corporate Governance, took effect immediately upon issuance on Wednesday (June 24).
DFIs prescribed under the Development Financial Institutions Act 2002 are namely Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat), Bank Pembangunan Malaysia Bhd, Bank Pertanian Malaysia Bhd (Agrobank), Bank Simpanan Nasional, Export-Import Bank of Malaysia Berhad (Exim Bank) and Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank).
The PMF policy document introduces a comprehensive framework for measuring how effectively DFIs fulfil their mandates, with greater emphasis on developmental outcomes, financial inclusion and socio-economic impact.
"The PMF is a strategic framework designed to strengthen the effectiveness of DFIs in delivering their developmental roles", BNM said, adding that it provides structured guidance for DFIs to formulate and implement strategies that generate additionality through their operations.
The framework sets expectations covering governance, strategic planning, talent development, data and systems, as well as service delivery channels, while introducing performance dimensions and indicators relating to additionality, social impact and operational efficiency.
The PMF policy document supersedes the Performance Measurement Framework Implementation Guide that was attached to the Corporate Strategic Plan policy document issued in May 2021.
Meanwhile, the revised CSP policy document introduces targeted enhancements to strengthen strategic planning in line with the PMF requirements.
Among the key enhancements are a stronger focus on developmental impact through clearer expectations on additionality and socio-economic outcomes, stronger governance and stakeholder engagement requirements, and more rigorous strategic planning standards linking strategy execution, risk management and funding capacity.
BNM said the revised policy document supersedes the previous Corporate Strategic Plan policy document issued on May 27, 2021, as well as several earlier guidelines relating to strategic planning and performance measurement.
Separately, the Corporate Governance policy document aims to strengthen governance standards to better support DFIs' developmental mandates and the implementation of the PMF.
BNM said the enhancements include stronger board oversight of mandate delivery and developmental performance, clearer accountability across senior management, and the institutionalisation of the PMF across strategy, operations and performance management.
The central bank added that the measures also seek to reinforce a development-oriented culture, strengthen transparency and better align incentives with developmental outcomes to support effective and accountable mandate delivery.
The corporate governance policy document supersedes the previous Corporate Governance policy document for DFIs issued on Feb 14, 2024.
The three policy documents are part of BNM's broader efforts to strengthen the development finance sector's ability to address funding and financial inclusion gaps, while ensuring DFIs remain financially sustainable and aligned with Malaysia's socio-economic development agenda.