Taipei, March 12 (CNA) Taiwan’s top financial supervisor, the Financial Supervisory Commission (FSC), has urged financial institutions in Taiwan and Indonesia to open outlets in each other’s country after they signed an memorandum of understanding (MOU) to speed up cooperation in supervising financial businesses.
The FSC inked the cooperation MOU Friday with its Indonesian counterpart the Financial Services Authority of Indonesia or Otoritas Jasa Keuangan (OJK). The MOU focuses on supervision cooperation in banking, securities and insurance businesses between the two countries.
FSC Chairperson Wang Li-ling (王儷玲) told the CNA that the cooperation MOU will no doubt facilitate financial development between the two countries.
Wang, who signed the agreement on the behalf of the FSC in Jakarta, added that she believed Taiwan’s financial sector will benefit from the great growth potential in Indonesia, while the Southeast Asian country has expressed interest in Taiwan’s financial market openness.
Wang said financial institutions in Taiwan and Indonesia should take advantage of the MOU to explore the financial market in each other’s country.
She said that is especially true as many Indonesian workers are working in Taiwan and there is strong fund demand from ethnic Chinese investors in Indonesia, leading Indonesian banks to want to set up footholds in Taiwan.
As for the large number of Indonesian workers in Taiwan, the supervisory mechanism under the newly signed MOU is expected to help them in a wide range of financial services in Taiwan, such as money remittances, deposits and insurance.
The Taiwanese official said that a populous Indonesia needs a diversity of financial products and Taiwanese financial institutions should go there to provide good products.
According to the FSC, the local banking sector has set up one subsidiary and two representative offices in Indonesia, and the local securities sector has opened a subsidiary there. The local insurance business sector meanwhile has taken a stake in an Indonesian bank, the TWSE said.
Market analysts said that the newly-signed MOU is expected to help Taiwan-based Cathay Life Financial Co. (國壽) push for a deal to acquire a 40 percent stake in PT Bank Mayapada Internasional of Indonesia. Cathay Life signed an agreement with Bank Mayapada for the acquisition deal in January 2015. Since the law in Indonesia bars foreign entities from taking a stake of more than 25 percent of any bank there and the deal has been stalled. Analysts said that the MOU could remove the legal obstacles for Cathay Life.