Members of the Association of Southeast Asian Nations (ASEAN) have finalized the ASEAN Banking Integration Framework (ABIF), which will allow the countries’ banks to enter into reciprocal bilateral agreements, Tan Sri Dato’ Sri Dr. Zeti Akhtar Aziz, the Governor of Malaysia’s Central Bank, BNM (Bank Negara Malaysia), announced on Saturday, Malaysia’s Bernama news agency reports.
The new banking framework, or ABIF, was finalized during the inaugural ASEAN Finance Ministers’ and Central Bank Governors’ Meeting which ended on Saturday.
The immediate objective of the framework is to achieve a more integrated banking market, spearheaded by Qualified ASEAN Banks (QABs), a joint statement said following the inaugural meeting.
“This is a major step forward. For post-2015, we have plans for the major areas that we are going to elaborate on to advance this integration,” Zeti said.
Under the ABIF, which took five years to develop, any two banks from two different ASEAN countries may enter into reciprocal bilateral agreements which will allow the banks to operate in the partner-country on the same terms as domestic financial institutions.
Zeti said that the ABIF would facilitate greater trade and investments within the ASEAN region.
“By having these banks facilitated, we are able to intermediate funds from one country to finance productive investment in another country,” Zeti explained.
The BNM chief also announced that the Central Bank of Indonesia and Malaysia’s Central Bank have already signed a memorandum of understanding (MoU) under the new integration framework.
The Association of Southeast Asian Nations (ASEAN) is a political and economic organisation of ten Southeast Asian countries which consists of Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar (Burma) and Vietnam.