The Selangor State government has given approval for foreign banks operating under Islamic banking to become registered homeowners in the state.

Menteri Besar Datuk Seri Mohamad Khir Toyo said the approval is subject to the ownership of properties in connection with banking activities approved by Bank Negara Malaysia.

"The approval covers business dealings among Malaysians and will take into consideration the property allocation for Bumiputera and non-Bumiputera in accordance with ownership criteria," he said.

The state government also agreed to go through with the approval of transfer of ownership to foreigners under Section 433B of the National Land Code when banks approve housing loans for them.

Mohamad Khir said that this would be under the condition that the house is priced over RM150,000 and not bought under the Bumiputera quota, as well as that permission is needed from the local authorities for houses under the quota.