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Financial authority to kick off negotiations with Philippine central bank
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OJK deputy commissioner for bank supervision Sukarela Batunanggar (second left) speaks to journalists during a media briefing in Jakarta on June 2. (JP/Prima Wirayani)
T
he Financial Services Authority (OJK) is set to sign a letter of intent (LoI) with Banko Sentral ng Pilipinas, the Philippine central bank, on Sunday, paving the way for lenders in the two countries to expand their cooperation.
The letter marks the entrance to a series of negotiations to reach a bilateral agreement under the ASEAN Banking Integration Framework (ABIF), which aims to improve the presence and roles of banks in ASEAN member countries.
Both countries will then negotiate and assess their qualified ASEAN bank (QAB) based on reciprocity and gap reducing principles.
(Read also: Indonesia, Malaysia ink deal in banking)
"That [the negotiations] will provide us several parameters, such as the economic potential and the interests of our banking industry [to expand]," OJK communications and international department head Triyono told journalists during a media briefing in Jakarta on Friday.
The agreement is bilateral because the regulators need adjustments and flexibility, given each country's regulations and requirements, said OJK deputy commissioner for bank supervision Sukarela Batunanggar.
"A bilateral agreement will accelerate that [process compared to a multilateral one]," he said.
Indonesia has formed a ABIF bilateral agreement with Malaysia’s Bank Negara Malaysia. It is in negotiations to reach a similar agreement with Bank of Thailand after signing a LoI in March last year. (bbn)
