by SHAZNI ONG/ pic by RAZAK GHAZALI
PERBADANAN Insurans Deposit Malaysia (PIDM) CEO Rafiz Azuan Abdullah (picture) said the organisation is looking at ways of improving its reimbursement systems and processes as part of its efforts towards building public confidence.
“For the planning period, we plan to complete our initiative to offer depositors another option for prompt reimbursement should the need arise. This means leveraging today’s available technological capabilities and electronic payment mechanisms,” Rafiz Azuan said in a recent statement.
“Resolution planning is also another key aspect of PIDM’s readiness aimed at heightening the financial system’s resilience.
“For example, resolution planning involves obtaining information from member institutions and identifying member institutions’ functions that are critical to the financial markets and the real economy,” he added.
This way, PIDM and other safety net players will be in a better position to address how they will respond during a crisis.
“Continuous engagements are being carried out to prepare PIDM’s member banks for the phased resolution plan rollout, expected to commence after 2022,” added Rafiz Azuan.
In its Summary of the Corporate Plan 2020-2022 released last Friday, PIDM outlined long-term strategic priorities including strengthening inter-agency collaboration on crisis management, continuing to develop internal capacity for IFR (intervention and failure resolution) readiness and leveraging electronic payment platforms for deposit reimbursements as a part of its key focus areas.
“We will leverage technology to improve on how we carry out reimbursements. The plan is in progress to allow for insured deposit payments by PIDM to be made electronically without depositor intervention, ie by not having depositors verify their identities or provide details of their alternative bank accounts. In 2020, we will work on the infrastructure and technology solutions to give effect to this objective,” the plan stated.
The three-year plan comprises resolution planning and intervention and failure resolution preparedness, strengthening trust and confidence among its stakeholders, and preparing its workforce for sustainability and growth.
The statutory body said it has budgeted to receive an income of RM642 million and operating expenditures of RM105 million, with a projected net surplus of RM536 million for 2020.
PIDM noted that public awareness about PIDM and its protection systems are vital in promoting confidence and trust in the financial system.
“One of our main efforts is to work together with various stakeholders during good times on the importance of planning and preparing for financial sector resolution and crisis management. To address this, we must strengthen relationships and build trust with key stakeholders,” it said.
The progress of the 2020-2022 initiatives, according to PIDM, will be monitored and reported to both the audit committee and the board of directors. As part of the monitoring process on the progress against targets, financial forecasts are also prepared.
“PIDM will continuously monitor its environment to ensure that the corporate plan remains relevant. Where appropriate, revisions may be made to the corporate plan when there are significant adverse developments that result in changes to the assumptions or priorities,” it explained.
The body will also continue to execute public relations and social media campaigns to educate the public and improve their awareness of PIDM’s protection systems.
As a statutory body, PIDM provides protection against the loss of deposits and insurance or takaful benefits with its member institutions in the event of a member institution failure.
Member institutions are required to pay annual premiums or levies to PIDM, which go towards their protection funds. These funds will be used to reimburse eligible depositors or make payments against eligible takaful and insurance claims should a member institution fail.