Thailand, Malaysia sign financial services agreement

The central banks of Thailand and Malaysia have signed an agreement that will facilitate the establishment of banks in the two countries and is part of a larger effort to deepen intra-Asian trade and investment.

Commercial lenders in Thailand and Malaysia can establish and expand their international branches more easily under the regional financial services framework agreement adopted by the two countries.

The Bank of Thailand (BOT) and Bank Negara Malaysia (BNM) said in a joint statement Tuesday that: “Banking institutions from Thailand and Malaysia are invited to express their interest in becoming an ASEAN Qualified Bank (QAB) in Malaysia and Thailand.”

Focus on intra-Asian trade

The Association of Southeast Asian Nations, or Asean, is a loose economic trading bloc made up of 10 Southeast Asian countries.

AEC Economic Community AEC World Map with Flags – Photo: Shutterstock

The BOT and BNM said in their joint statement that QABs are intended to increase the volume of intra-ASEAN trade and investment.

Under the bilateral agreement, up to three Malaysian lenders can more easily access the Thai market and vice versa, Bangkok Post reported later. Currently, two Malaysian banks (CIMB and RHB) operate in Thailand, while Bangkok Bank is the only Thai lender operating in Malaysia.

Existing banks can convert to QAB

The deal allows existing and new banks to apply for a QAB license, allowing them to open more branches and offer broader services than non-QAB foreign banks.

“The arrangement will bring a wider range of high-quality financial products that will better meet the needs of businesses and consumers in both countries,” said BOT Governor Sethaput Suthiwartnarueput.

BNM Governor Nor Shamsiah Mohd Yunus said, “We are making great strides towards creating an integrated and cohesive ASEAN economy, and we are confident that the QAB agreement will foster more business opportunities and of economic activity between the two countries in order to facilitate both our economic recovery amid the ongoing pandemic. “

Read more: India and Singapore to link mobile payment ecosystems

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