BPNG, as a corporate statutory body established by the Central Banking Act 2000 (CBA), is empowered to supervise the operations of the licensed financial institutions, including commercial banks, licensed financial institutions, savings & loan societies, superannuation funds and life insurance companies. The primary function of Bank, as the prudential supervisor, is to foster efficiency, maintain confidence and stability in the financial system.
Effective prudential supervision of financial system is an essential component of a strong economic environment because the financial sector plays a central role in mobilizing the necessary capital for private sector participation in the economy to stimulate economic growth. Prudential supervision, however, cannot, and should not, provide an assurance that financial institutions will not fail.