PT Bank Negara Indonesia (BNI) has submitted an expansion proposal to the Indonesian and Malaysian regulators to establish a network branch in Malaysia. The target is to have the branch working by the first half of 2017.
Chairman of PT BNI Achmad Baiquini said in Jakarta on Thursday that the Financial Services Authorities (OJK) signed a reciprocal bilateral agreement with the Malaysian Central Bank in August.
Since then, the bank began putting together documentation to execute an expansion in Malaysia.
“We should be able to establish a network there within the first semester of 2017,” he added.
Once the bank explores the sector, he noted, it will delve into the remittances business, which will allow Indonesian laborers in Malaysia to send money to their families back home.
The bank is also looking at trade financing in Malaysia.
Remittances, he observed, will also act as a good start to initiate a digital banking business in Malaysia.
In the future, the banking services would shift solely to digital platforms in Malaysia.
As for capital funds prepared by the bank, Baiquini was reluctant to reveal the details.
“We will surely follow the agreement signed by the Authority and Malaysia, and will follow all their guidelines,” he remarked.
Indonesia and Malaysia had signed a bilateral partnership agreement on August 1 as part of the ASEAN Banking Integrated Framework.
As part of such cooperation, which emphasizes the principle of reciprocity, Indonesias bank will receive a cost reduction incentive for network expansion in Malaysia, including admission fee and payment system fee.
The Financial Services Authoritys Deputy Supervisor, Mulya Siregar, pointed out that the admission fee for Indonesia has been reduced from 10.4 million Ringgits to 5.2 million Ringgits.
“Costs regarding payment systems, including Automatic Cash Machines, also went down from 4 Ringgit to 1 to 2 ringgit per transaction,” informed Siregar.