Malaysia’s CIMB Bank worried about slow pace of ASEAN measures to spur “ASEAN Banks”

Map of the current ASEAN members.

Map of the current ASEAN members. (Photo credit: Wikipedia)

Since the Tom Yum Koong, financial crisis, hit Thailand, some 10 to 15 years ago, the closed and monopolistic, Thai banking industry have seen a many foreign banks taking over Thai banks, and today banks from other ASEAN country, is active in Thailand, such as Singapore’s UOB. However, Thai banks, by and large, have not went on a major expansion in ASEAN, but have knitted together, mostly, an ASEAN-wide, small branch net in other ASEAN countries. However, with ASEAN AEC looming, the power-house of ASEAN banking, such as Singapore and Malaysia, are now taking about the concept of “ASEAN Bank.”

Bernama reports;

Asean should draw a clear masterplan that contains strategies on how banks can operate to achieve banking integration by 2015, CIMB Group Holdings Bhd Group chief executive Datuk Seri Nazir Razak said today. Although there has been great progress like the endorsement of the Asean Banking Integration Framework, certain criteria, particularly on a qualified Asean banking, still lags details. Under the framework, qualified Asean banks refer to high quality banks that satisfy stringent requirements and allow to operate in other Asean members’ jurisdictions with specific requirements. “Many of us have gone around the region trying to build our business but grappling with what are the changes that are going to facilitate us in building Asean banks. “We hope regulators could work together and get a clear framework on the masterplan for Asean banking so that we can all prepare,” he told reporters on the sidelines of the World Capital Market Symposium in Kuala Lumpur today.

Nazir also said Malaysia’s banking masterplan was a phenomenal work by Bank Negara Malaysia which allows industry players to look 10 years ahead while at the same time align their businesses accordingly. Earlier, during a panel discussion on the Asean Economic Community (AEC) at the symposium, Nazir reiterated his suggestions on the importance of Asean countries to have a Asean ministry to promote AEC. “Nobody is promoting AEC within their countries now and if people at large don’t buy-in to AEC, probably there will be disappointments and push backs when it is implemented in 2015. “The worst thing about liberalisation is when you liberalise, you have to back track and then the danger of the whole concept of Asean integration will get a setback,” he said. Meanwhile, Nazir said economic nationalism in Indonesia is on the rise because AEC is coming within two years and three months but the country, which is the largest economy in Asean and incredibly capable should take the lead. “There is a need to get Indonesia comfortable with AEC, which is good to transform Asean into a region with free movement of goods, services, investments, skilled labour and freer flow of capital. “Over 600 million people will benefit from it and there will be winners and losers. “However, every effort must be made to soften the blow for the losers such as create funds to help them prepare for AEC,” he added

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