The financial regulators of Malaysia and Indonesia have signed an agreement to give their banks greater access and operational flexibility operating in the respective jurisdictions.
Bank Negara Malaysia signed a bilateral agreement with Otoritas Jasa Keuangan under the ASEAN Banking Integration Framework (ABIF).
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The MoU covers areas of supervisory cooperation and coordination, including exchange of information, facilitation of consolidated and cross-border on-site supervision, financial crime and crisis management.
As per the agreement, each country will allow the formation of three banking groups which would be afforded the same treatment as local lenders. In the case of Malaysian banks, this number will include banking groups that are already operating in Indonesia.
The pact would also support requirements on launch of branch office and ATM installations, QAB access to electronic payment systems, types of business activities in the banks, capitalisation as well as customer funds insurance.
OJK board of commissioners chairman Muliaman Hadad said: "The bilateral agreement signifies a strategic step intended in particular to develop the role of local banking sectors in ASEAN countries, in accordance with the spirit promoted by ABIF.
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By GlobalData“The agreement offers opportunities to companies in financial services industry, especially banks, to expand their business in Malaysia."
