KUALA LUMPUR (REUTERS) - Malaysia's central bank said on Monday it has signed agreements with its counterparts in Thailand and the Philippines on market access and operational flexibility for lenders, as the ASEAN countries move towards an integrated banking market.
The Association of Southeast Asian Nations (ASEAN) established an ASEAN Economic Community at a summit in Kuala Lumpur in November, aiming to promote the flow of trade, capital and professional labour in a single market of 625 million people with combined economic output of US$2.6 trillion (S$3.5 trillion).
The bloc's 10 nations have been discussing economic and banking integration for years, with the idea of increasing access for each country's lenders to the others' markets. "This signifies a major step forward in the advancement of an integrated banking market within ASEAN and towards strengthening intra-regional trade and investment," Bank Negara Malaysia, the central bank, said in a statement. No further details were given.
Bank of Thailand said the agreement was a foundation for future bilateral negotiations on the establishment of Qualified Asean Banks (QABs) in each country.
In a separate announcement, Malaysia and Thailand also appointed banks to support plans for improved trade settlement.
Malaysia's CIMB Bank Berhad and Maybank, as well as Bangkok Bank Public Company Limited and Kasikornbank Public Company Limited, were appointed dealers for the settlement of Ringgit-Baht trade under a Local Currency Settlement Framework that was signed between the two countries in August.