JAKARTA (Reuters) - Indonesia's financial services regulator will be more strict on foreign acquisitions of banks in Southeast Asia's largest economy and will prioritise agre

ements on market access with authorities in other countries, a top official told Reuters.

"Yes," Muliaman Hadad, chairman of the regulator's board of commissioners, said in a text message, when asked if it will be more stringent in giving its approval if there is no reciprocal agreement with the country of the potential acquirer.

"We will prioritize MOU (memorandums of understanding) and agreements with the authorities in each country," he added.

RHB Capital, Malaysia's No.4 lender, said on Monday it had canceled its plan to buy a stake in Indonesia's PT Bank Mestika Dharma after failing to win approval from Indonesia's financial services authority.

In July last year, Singapore's DBS Group Holdings said it would not pursue a US$7.2 billion takeover of Indonesia's PT Bank Danamon after Indonesia's central bank capped foreign ownership of its banks at 40 per cent.