BANGKOK: The Bank of Thailand (BoT) expects to finalise a deal with Malaysia’s central bank, Bank Negara Malaysia (BNM), on Qualified Asean Banking (QAB) criteria soon, paving the way for indigenous banks in one country to operate in the other and receive treatment as local banks.
According to BoT Governor, Veerathai Santiprabhob, it was in the process of negotiating with Indonesia’s Financial Services Authority and the Central Bank of Myanmar on the establishment of QAB.
“We are negotiating with three central banks but the agreement with Malaysia should soon be finalised,” he was quoted as saying by the local media yesterday.
BoT signed its first Heads of Agreement on a reciprocal bilateral arrangement regarding QAB with BNM on March 14 last year, he added.
The bilateral arrangement is part of an umbrella agreement called the Asean Banking Integration Framework, which provides greater access for indigenous Asean banks to other member countries’ banking sector as well as operational flexibility on a reciprocal basis.
Two Malaysian financial institutions, CIMB Group and RHB Bank have banking operations in Thailand while Bangkok Bank’s wholly-owned subsidiary, Bangkok Bank Bhd, operates in Malaysia.
Veerathai said Asean central banks shared a common goal of promoting financial integration among the regional grouping.
“We see integration in terms of investment and trade between Thai companies and neighbouring countries continuing to strengthen. Thai financial institutions also have expanded their operations into neighbouring countries,” he said. — Bernama