Banking sector is developing rapidly in Malaysia and commercial banksare become the most important part of the financial institutions. Malaysianbanking system consisted of monetary and non-monetary institution. The monetaryinstitution are the central bank which known as Bank Negara Malaysia (BNM), andthe commercial banks included Bank Islam.

However, the non-monetaryinstitutions comprised into two categories; the first group is supervised byBank Negara Malaysia (BNM); comprises commercial banking institutions(including Islamic), investment banks and development financial institutions.The second is under the supervision of several government agencies anddepartments (IMF, 2014).  Bank Negara Malaysia or known as Central Bank of Malaysia is astatutory body which established on 1959 (BNM, 2016).

BNM is governed by theCentral Bank of Malaysia Act 2009. The role of BNM is to promote monetary andfinancial stability. This is aimed at providing a conducive environment for thedevelopment of Malaysian economy (BNM, 2016). According to ASEAN +3 Bond MarketGuide, Malaysia (2016), BNM focuses on three important elements of centralbanking which are monetary stability, financial stability and payment system.Furthermore, importance has given to the development of BNM align to economicmanagement, institution building and strengthening of financial system.

The primary functions of BNM are as below:a)              Formulate and implement monetarypolicy in Malaysiab)             Issues currency in Malaysiac)             Regulate and monitor financial institutionsd)            Hold and manage the foreign reserve of Malaysiae)             Act as financial advisor, banker and financial agent of government.f)              Provide foreign exchange marketSource : ASEAN +3 Bond Market Guide 2016, MalaysiaThebanking services considered as one of the largest and important industry inMalaysia. This industry encourages the development of new infrastructure whichprovide new income opportunities (Productivity Report 2010/2011).

Banking isone of the sector that experiencing major challenges due to globalization.According to Panatik & Noordin (2015), banking industries in Malaysia haveto cope with technological changes, managerial changes and global