KUALA LUMPUR: Bank Negara Malaysia has given its approval for the talks to merge Malaysian Industrial Development Finance Bhd (MIDF) with Al Rajhi Banking & Investment Corporation (Malaysia) Bhd.

MIDF said on Thursday it had received a letter from the central bank that it has no objections for MIDF and its sole shareholder Permodalan Nasional Bhd (PNB) to start talks with Al Rajhi Banking & Investment Corporation for the proposed merger. 

“The negotiations must be completed within three months from the date of the letter issued by Bank Negara,” it said.

MIDF said this should not be construed as implying that a final merger agreement will be reached or that Bank Negara as approved the merger. 

“MIDF will have to obtain prior approval from Bank Negara or the Minister of Finance, with the recommendation of Bank Negara, as the case may be, pursuant to the Islamic Financial Services Act 2013 and the Financial Services Act 2013 before entering into any agreement to effect the proposed merger. 

“If an agreement is achieved, it will also be subject to various conditions, including all relevant legal requirements and the approval of all regulatory authorities involved, in both Malaysia and the Kingdom of Saudi Arabia. 

MIDF group managing director Datuk Charon Mokhzani said: “We are grateful for the approval from Bank Negara for us to start negotiations. We look forward to having fruitful discussions with Al Rajhi Banking & Investment Corporation, Kingdom of Saudi Arabia, and to a mutually beneficial outcome.”