REPUBLIKA.CO.ID, JAKARTA -- Three Indonesian banks have expressed an interest to expand their business to Malaysia, according to the Financial Service Authorities (OJK).
"Of the four banks under BUKU IV category only BCA (Bank Central Asia ) is not interested in it," OJK's bank supervisory deputy Mulya Siregar said.
There are only four banks in Indonesia that fall under BUKU IV category of banks with core capital recorded above Rp 30 trillion. Besides BCA the other banks in the category are Mandiri Bank, BNI and BRI which are all state-owned companies.
"Except BCA, the others are interested," Mulya Siregar said.
He said however that none of the three banks had registered to OJK with regard to their inyention to set up financial firms in Malaysia.
The three banks may enjoy ease facilities from the Malaysian government if they expand to Malaysia because they are classified as "Qualified ASEAN Banks" .
QAB is a criteria given to banks in their respective countries if they wish to expand abroad based on the ASEAN Banking Integration Framework agreement which is planned to be signed by Indonesia and Malaysia on Monday.
Mulya said the criteria for QAB membership include having strong capital, good corporate governance and domestically public-owned assets.
He could not as yet be able to confirm when the three banks would realize their investment in Malaysia. It would all depend upon readiness of the banks concerned, he said adding that they would not only set branch offices but also subsidiaries in Malaysia.
If the agreement on the bilateral cooperation between Indonesia and Malaysia is signed the three banks would be given cheaper expansion cost but capital requirement would remain at 300 Malaysian ringgit.
The negotiation process for the cooperation under the ABIF framework has gine for six years since 2011.
Two Malaysian banks - Maybank and CIMB Niaga - have long operated in Indonesia which is the biggest market in the ASEAN region.
Indonesian banks have so far been hurdled to expand to Malaysia through the imposition of high cost.
"Malaysian regulations have differentiated between foreign and domestic banks. Therefore we have sought ABIF to ceeate reciprocality," he said.
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