Guidelines on the Differential Premium Systems - PIDM

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Ref No DI/GL2-A1/2011(DPS) Issued on 4 March 2011TITLE<strong>Guidelines</strong> on The Differential Premium SystemsSECTION 2:SCOPE OF APPLICATION2.1 Subsection 42(1) of the Malaysia Deposit Insurance Corporation Act 2011 (the “Act”)provides that PIDM shall provide separate insurance coverage for Islamic andconventional deposits placed with a member. Accordingly, two separate DPS areintroduced for Islamic and conventional members respectively.2.2 Table 1 describes which set of DPS criteria applies in respect of an entity’s businessor businesses.Table 1: Scope of ApplicationEntityBusinessConventionalDPS CriteriaIslamicDPS CriteriaConventionalMembersIslamicMembersConventionalIslamic bankingschemeIslamicXXXPage 3
Ref No DI/GL2-A1/2011(DPS) Issued on 4 March 2011TITLE<strong>Guidelines</strong> on The Differential Premium SystemsSECTION 3:DIFFERENTIAL PREMIUM SYSTEMS FRAMEWORK3.1 METHODOLOGY AND WEIGHTAGE3.1.1 A member shall be assessed and classified into different premium categories in anassessment year based on a combined quantitative and qualitative criteria approach.3.1.2 In order to achieve higher objectivity and transparency, a larger weightage isassigned to the quantitative criteria, i.e. 60 out of a total score of 100, while a scoreof 40 is assigned to the qualitative criteria.3.2 CRITERIA3.2.1 Table 2 summarises the criteria and scoring system for the DPS:Table 2: Summary of Criteria, Measures and ScoresCRITERIAMAXIMUMSCOREQuantitative Criteria 60Capital 20Risk-weighted Capital Ratio 10Core Capital Ratio 10Profitability 15Return on Risk-weighted Assets Ratio 8Mean Adjusted Return Volatility 7Asset Quality 15Net Impaired Loans To Capital Base Ratio 8Total Impaired Loans Ratio 7Asset Concentration 5Household Sector Concentration Ratio; and AggregateSector Loans Concentration Ratio5Asset Growth 5Risk-weighted Assets To Total Assets Ratio; andTotal Asset Growth Ratio5Qualitative Criteria 40Supervisory Rating 35Other Information 5TOTAL 100Page 4
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Guidelines on the Differential Premium Systems - PIDM

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