Indonesia Financial Services Authority of Indonesia (Otoritas Jasa Keuangan or OJK) has directed that no more Malaysian bank will be allowed to operate in Indonesia as long as Indonesian banks were unable to set up branches in Malaysia, reports The Jakarta Post.
The move comes after OJK inked an agreement with Bank Indonesia and Malaysia’s central bank Bank Negara Malaysia, to support ASEAN banking integration (ABIF).
ABIFintends to open as well as extend market access for qualified ASEAN banks in ASEAN countries.
The financial watchdog said that the deal involved reciprocal principles.
At present, three Malaysian banks, namely CIMB Niaga, BII-Maybank and Maybank Syariah, operate with branches in Indonesia.