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Malaysia to scrap KLIBOR rate; Canadian firm wins nod for India bank deal

S&P Global Market Intelligence offers our top picks of banking news stories and more published throughout the week. Please note that some entries have links to third-party sources that may require a subscription.

Malaysia to phase out 9-month KLIBOR rate, other regulatory news

* Bank Negara Malaysia will phase out the nine-month Kuala Lumpur Interbank Offered Rate, or KLIBOR, effective Jan. 1, 2018. Separately, the central bank took action against an unnamed financial institution for failing to promptly notify the regulator of a significant audit finding in relation to its dealers fixing the U.S. dollar-ringgit exchange rate.

* The Philippine central bank said it would allow certain regulatory incentives for financial institutions involved in M&A of banks and quasi-banks.

* China's State Administration of Foreign Exchange suspended three banks from selling foreign currency for their involvement in US$2.7 billion worth of illegal foreign exchange transactions in Shanghai in 2016.

* The People's Bank of China and the China Banking Regulatory Commission are considering relaxing auto finance regulations, including lifting the 80% cap on the amount of a car that a consumer can borrow from a lender.

* Meanwhile, the CBRC approved the establishment of two privately run banks in Beijing and Nanjing, China.

* The Australian Securities and Investments Commission said Suncorp-Metway Ltd. paid a total of A$530,000 in penalties and customer refunds for violating consumer protection provisions.

* Separately, ASIC initiated civil penalty proceedings in the Federal Court against Westpac Banking Corp. subsidiaries BT Funds Management Ltd. and Westpac Securities Administration Ltd. for alleged violations. BT Funds Management rejected the commission's interpretation of general versus personal advice, saying it will vigorously oppose the proceedings.

* The State Bank of Pakistan asked banks and development finance institutions to increase the minimum number of independent directors to 33% of the total board size from 25%, effective March 31, 2018. Separately, the central bank issued rules for financial institutions to identify possible doubtful transactions related to money laundering or financing of terrorism.

* Bank Negara Malaysia and Bank of Thailand have signed an agreement with Bank Indonesia to promote the use of their respective local currencies in trade and investment.

* India's central bank decided to allow the trading of interest rate options, effective Jan. 31, 2017. Separately, the Indian government is setting out a legal framework that defines the standards and liabilities of payment companies to protect customer data.

M&A updates

* Canada-based Fairfax Financial Holdings Ltd. has reportedly won in-principle approval from India's central bank to acquire a 51% stake in Catholic Syrian Bank Ltd.

* UnionBank of the Philippines subsidiaries City Savings Bank Inc. and Union Properties Inc. received regulatory approval for the joint acquisition of a majority stake in First-Agro Industrial Rural Bank.

* Guangzhou Yuexiu Financial Holdings Group Co. Ltd. plans to buy a 32.8% stake in Guangzhou Securities for 6.3 billion Chinese yuan via cash and share issuance.

* Bank of Queensland Ltd. completed the acquisition of Centrepoint Alliance Ltd.'s premium funding business. The acquired business will be rebranded and will form a new division within BOQ Finance.

* Hongkong Chinese Ltd., Nam Yue (Group) Co. Ltd. and an individual investor agreed to extend the date for obtaining approval of the Monetary Authority of Macau for the proposed sale of a 31% stake in Macau Chinese Bank Ltd. to June 30, 2017.

* DBS Group Holdings Ltd. boosted its shareholding in unit DBS Bank Ltd. by subscribing to an additional 36,599,099 ordinary shares in the capital of the bank for S$650 million in cash.

In other news

* China Construction Bank Corp. and Industrial & Commercial Bank of China Ltd. signed separate debt-to-equity swap deals worth 30 billion yuan each with state-owned coal and steel firms.

* Thai police raided a major loan shark network that distributed around 4 billion baht of loans in the country. Authorities have frozen 28 bank accounts and 14 safes and arrested the gang's IT chief as part of the raid.

* India's IDFC Bank Ltd. is seeking to merge its various lending divisions and cut its workforce in an effort to improve client coverage models and increase operating synergies.

* Japan Bank for International Cooperation and Sumitomo Mitsui Banking Corp. will help Japanese regional banks in project financing for Asian electric power infrastructures.

* Credit China FinTech Holdings Ltd signed a memorandum of understanding with Malaysia-based ManagePay Systems Bhd. to boost financial technology services in Malaysia and in other Southeast Asian countries.

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