What PIDM protects
PIDM, the Malaysia Deposit Insurance Corporation, is a government agency. It was set up in 2005 to run Malaysia's Deposit Insurance System.
Its members are commercial banks licensed under the Financial Services Act 2013 and Islamic banks licensed under the Islamic Financial Services Act 2013. This includes locally incorporated subsidiaries of foreign banks.
Protection is free and automatic. Depositors do not apply or pay for it. Member banks pay the premiums.
PIDM protects deposits up to RM250,000 per depositor, per member bank. Accounts in your sole name at the same bank are added together under that limit.
Protected products at a member bank include savings, current and fixed deposit accounts, Islamic deposit accounts and foreign currency deposits.
Where Labuan banks fit
Labuan banks are licensed and supervised by the Labuan Financial Services Authority, or Labuan FSA. The main laws are the Labuan Financial Services and Securities Act 2010 and the Labuan Islamic Financial Services and Securities Act 2010.
Labuan FSA says a Labuan bank can receive deposits in any currency, including ringgit where Bank Negara Malaysia permits it. A Labuan investment bank is not allowed to accept deposits.
PIDM's own list of deposits it does not protect names deposits payable at Labuan banks. It also excludes deposits not payable in Malaysia, such as offshore deposits.
In plain terms, money placed as a deposit with a Labuan bank sits outside PIDM's deposit insurance. The RM250,000 limit does not apply to it.
Other things PIDM does not cover
PIDM also lists investment products as unprotected. These include unit trusts, stocks and shares.
Gold and silver related products, repurchase agreements, and Bitcoin and other cryptocurrencies are also outside its protection.
Investment banks, development financial institutions, cooperative banks and overseas branches of member banks are not PIDM members.
How to check a bank yourself
To see whether a bank is a PIDM member, look for the PIDM membership sign at the branch entrance, or check the list of member banks on pidm.gov.my.
To check a Labuan bank, use Labuan FSA's Financial Institutions Directory at labuanfsa.gov.my/financial-institutions-directory. Search for the bank's exact name. Compare the address and contact details with what you were given.
Bank Negara Malaysia's Financial Consumer Alert List at bnm.gov.my/consumer-alert names entities that may have been wrongly presented as licensed or regulated by BNM. BNM says a name missing from the list should not be taken as confirmation that it is licensed.
SmartChecker shows register records and reviews for the companies it lists, so you can compare what a firm says about itself with what the official registers show.
Common questions
Is my deposit at a Labuan bank covered up to RM250,000? No. PIDM lists deposits payable at Labuan banks among the deposits it does not protect.
Are foreign currency deposits protected by PIDM? Yes, when they are placed with a PIDM member bank. PIDM lists foreign currency deposits among the protected products.
Do I need to apply for PIDM protection? No. PIDM says protection is free and automatic for eligible deposits at member banks.
Can a Labuan investment bank take deposits? No. Labuan FSA says a Labuan investment bank is not allowed to accept deposits.