Bank Negara signs HoA with Bank Indonesia and Otoritas Jasa Keuangan

PETALING JAYA: Bank Negara Malaysia (BNM), Bank Indonesia and Otoritas Jasa Keuangan have signed a Heads of Agreement (HoA) which serves as a precursor to the conclusion of the Asean Banking Integration Framework (ABIF).
The agreement outlines the areas that will be bilaterally implemented between Malaysia and Indonesia under ABIF.
The agreement aims to pave the way for the finalisation of the ABIF guidelines and the subsequent endorsement of ABIF under the Asean Framework Agreement on Services (AFAS).
"The HoA is a positive step in signifying the applicability of the bilateral process under the ABIF and will hopefully serve to encourage other bilateral arrangements under ABIF," BNM Governor Tan Sri Dr Zeti Akhtar Aziz said in a statement yesterday.
The agreement sets out the definition of Qualified Asean Banks (QABs), which entails the presence of Malaysian and Indonesian banks in each other's jurisdiction.
It also identifies the market access and operational flexibilities that will be accorded to the banking institutions once conferred and established as a QAB in the respective jurisdiction.
ABIF will enable Asean countries to deepen regional banking integration via mutually beneficial arrangements, based on the level of readiness, with its immediate objective of achieving a more integrated banking sector.
"For Indonesia and Malaysia, greater financial integration has the potential to significantly facilitate greater bilateral trade and cross border investments between our respective countries, and thus contributes to growth that will be mutually reinforcing," Zeti added.