Asean scraps unified rule for banks

MANILA, Philippines - The Association of Southeast Asian Nations (Asean) has scrapped a unified rule for banks wanting to operate outside their home country, Bangko Sentral ng Pilipinas Deputy Governor Nestor Espenilla said yesterday.

Espenilla said the earlier plan to come up with a set of unified regulations for a Qualified ASEAN Bank (QAB) has already been discarded.

“So whatever our rules are, that is the rule that a QAB have to comply with... the original discussion is going nowhere so now the consensus is to follow the local rule,” Espenilla said.

Members of the Asean have been working on creating an integrated economic community by 2015. Part of this is the Asean Banking Integration Framework (ABIF), set for full implementation by 2020.

Since the ABIF’s objective is to create strong and well-managed banks in the region, exposing banks to brisker competition and allowing them access to bigger markets are being eyed under the framework.

“The important thing is, you cannot have a discriminatory rule. So whatever rules you have for local banks, the same should apply to QABs,” Espenilla said.

“We are promoting reciprocity and a level-playing field,” he added.

The central bank official stressed that the BSP will not require any local bank to become a QAB as such is a business decision.

“But I think some of our banks are ready. You will notice some of the big banks are already going beyond the Philippine border and testing their wings,” Espenilla said.

“The big banks are also going provincial and penetrating (rural) markets... so by the time the competition arrives, they are already entrenched in those markets,” he continued.