Rules Come into Effect for Thai and Malay Banks to Set Up in Each Other’s Markets
Thai and Malaysian banking institutions have been invited to indicate their interest to be a Qualified ASEAN Bank (QAB) in Malaysia and Thailand, which would pave the way for their operation in respective markets.
The bilateral arrangement forms part of the ASEAN Banking Integration Framework (ABIF) signed between Bank Negara Malaysia (BNM) and the Bank of Thailand (BOT) in April 2019 and is a step in the ASEAN Economic Community Blueprint 2025 that aims to create an integrated and highly cohesive ASEAN economy.
The provision enabling the implementation of ABIF is in the Protocol to Implement the 6th Package of Commitments on Financial Services under the ASEAN Framework Agreement on Services (AFAS), which was signed by the ASEAN Finance Ministers in March 2015.
A QAB candidate, whether a new entrant or an existing bank in the host country, must be a strong and well-managed bank that has its interest endorsed by the home country’s regulator; and comply with the host country’s prudential requirements. A successful QAB candidate will enjoy market access and operational flexibilities accorded under the bilateral arrangement.
“This bilateral arrangement signifies the strengthening of economic ties between Malaysia and Thailand, and it is set to benefit the people of both countries where they will be able to enjoy better banking convenience as well as access to a wider range of banking products.,” said Ms. Nor Shamsiah Yunus, the Governor of Malaysia’s BNM. “The arrangement will bring about a wider range of high-quality financial products that will better serve the needs of businesses and consumers in both countries.,” said Mr. Sethaput Suthiwartnarueput, BOT’s Governor.