Bank Negara Malaysia, Bank Indonesia and Otoritas Jasa Keuangan signed a Heads of Agreement today, which serves as a precursor to the conclusion of the ASEAN Banking Integration Framework (ABIF). The Heads of Agreement outlines the areas that would be bilaterally implemented between Malaysia and Indonesia under ABIF. The Agreement sets out the definition of Qualified ASEAN Banks (QABs), which entails the presence of Malaysian and Indonesian banks in each other’s jurisdiction. The Heads of Agreement also identifies the market access and operational flexibilities that will be accorded to the banking institutions once conferred and established as a QAB in the respective jurisdiction.
 
The conclusion of the Heads of Agreement aims to pave the way for the finalisation of the ABIF Guidelines and the subsequent endorsement of ABIF under the ASEAN Framework Agreement on Services (AFAS). ABIF is an innovative and pragmatic approach that will enable ASEAN countries to deepen regional banking integration via mutually beneficial arrangements, based on the level of readiness. The immediate objective of ABIF is to achieve a more integrated banking sector, spearheaded by QABs that have meaningful presence across ASEAN countries. The ABIF process consists of two stages - the multilateral and bilateral stages. The multilateral stage is the establishment of the ABIF Guidelines, while the bilateral stage comprises negotiations among the ASEAN countries on the admission of QABs and the reciprocal arrangements, in particular, relating to market access and operational flexibility.
 
The Heads of Agreement was signed by Governor Dr. Zeti Akhtar Aziz, Bank Negara Malaysia, Governor Agus D.W. Martowardojo, Bank Indonesia and Dr. Muliaman D. Hadad, Chairman of Board of Commissioners, Otoritas Jasa Keuangan.