ASEAN plans to adopt an 'ASEAN bank' system

SINGAPORE (Kyodo) -- Central banks in the Association of Southeast Asian Nations plan to set up an "ASEAN bank" system that would make it easier for designated banks to set up subsidiaries and operate throughout the region, according to official sources.

The plan to set up ASEAN banks is part of a wider roadmap to integrate the region's financial markets in line with ASEAN's goal to create an economic community by 2015.

ASEAN central bank governors are expected to discuss the initiative at meetings to be held on the sidelines of the ASEAN finance ministers meeting in Phnom Penh later this month.

The banks to be selected are required to be headquartered within ASEAN, financially sound and already operating in the region.

"If accepted, a bank can have a license automatically from the 10 member countries," an official source said. "The ultimate goal is to promote financial market integration, one of the core ideas of the ASEAN Economic Community."

For the plan to be successfully implemented, ASEAN countries will probably have to narrow the gap in the stage of development of financial markets in the region.

The plan is thus likely to begin only in Singapore, Malaysia, Thailand, Indonesia and the Philippines, the five more developed countries in the region.

The financially developed member states are expected to provide technical assistance to other five ASEAN members -- Brunei, Vietnam, Cambodia, Laos and Myanmar -- where financial markets are less developed.

A separate source said ASEAN central banks will set up a working group to draw up an ASEAN bank standard.

According to the source, so far only three banks -- from Singapore, Malaysia and Thailand -- meet the anticipated standard.

"These are banks that have subsidiaries or branches in other ASEAN countries. Most likely they will be the first to enjoy the scheme," the source said. "The purpose is to integrate banking services in the region. There should be more ASEAN banks in other countries, more flow of banking services, and there should be some common standard in the region."

ASEAN central bank governors will gather in Phnom Penh for a series of meetings that start with the ASEAN Central Bank Forum on March 26, culminating in a meeting of ASEAN central bank governors March 29.

Central bank governors from Cambodia, Indonesia and Brunei will also take part in the ASEAN finance ministers' meeting to be held March 30.

(Mainichi Japan) March 7, 2012