Mumbai: Malaysian central bank Bank Negara Malaysia said it will allow commercial and investment banks in the country to set up international currency business units (ICBUs) to undertake international currency business under Islamic finance in Malaysia.

It had earlier allowed Islamic banking business in international currencies under a division set-up at Malaysian Islamic banks licensed under the Islamic Banking Act 1983.

"Commercial and investment banks licensed under the Banking and Financial Institutional Act 1989 are now allowed to establish ICBUs to carry out Islamic banking business under their existing entities," BNM governor Zeti Akhtar Aziz said in a keynote address at the second Malaysian Islamic Finance 2007 conference.

To date, eight financial institutions have been granted approval to set up ICBUs in Malaysia, Zeti said.