KUALA LUMPUR, Malaysia (AP) — Southeast Asian nations Saturday wrapped up a key agreement allowing qualified banks to operate freely in each other's countries in a push toward greater financial and economic integration.
The regional banking integration framework is part of efforts to create an economic community by the end of the year, making the 10-member Association of Southeast Asian Nations a single market and production base.
ASEAN finance ministers and central bank governors said in a joint statement after a two-day meeting that qualified ASEAN banks can now operate with greater market access and be accorded flexibilities similar to those of domestic banks in the host country.
They said this will help accelerate the pace of regional financial integration and boost cross-border trade and investment.
"It took us five years from conception to operationalize this. This is very exciting. This is something concrete, it's a major progress for ASEAN," Malaysian central bank governor Zeti Akhtar Aziz told reporters.
Zeti said allowing qualified ASEAN banks to operate as a domestic bank across the region will help to deepen trade and investment links to "unlock potential growth" in the region. Inter-regional trade is already on the rise, accounting for just over a quarter of ASEAN's trade, she said.
No further details were immediately available on how a bank in one country can qualify as an ASEAN bank. Currently, regional countries place stringent limits on foreign banks to protect their domestic industry, including limiting foreign equity participation and curbing their expansion and market access.