Photo by Mandiri Remittance

JAKARTA (TheInsiderStories) – The largest bank in terms of assets PT Bank Mandiri Tbk (IDX: BMRI) announced its plan to set up full branch office in Malaysia after securing the license of Qualified ASEAN Bank (QAB) from Bank Negara Malaysia (BNM).

The office with name Bank Mandiri Sdn Bhd will start operating by the end of 2017 and will start off in corporate customers. Currently, Bank Mandiri runs a remittance business in Malaysia under its subsidiary Mandiri International Remittance Sdn Bhd.

Muliaman D. Hadad, Chairman of the powerful Financial Services Authority (OJK) highly welcomed Malaysia’s banking authority for supporting the presence of Indonesian banks in Malaysia.

“Bank Mandiri is the first bank from Indonesia which secured QAB license, so Bank Mandiri will be equally treated as Malaysian banks,” he said, adding that this is a progress on strengthening the cooperation between Indonesia and Malaysia.

Muliaman and Bank Mandiri’s president director Kartika Wirjoatmodjo on Thursday (July 6) met with Dato’ Muhammad Ibrahim, governor of BNM and made this announcement. Kartika said, Bank Mandiri Bhd is the first branch which will fully operate overseas.

Currently Bank Mandiri operates seven office branches overseas in Cayman Islands, Timor Leste, Hong Kong, Shanghai and Singapura while two subsidiaries are Bank Mandiri Europe Limited in London and  Mandiri International Remittance in Malaysia. Bank Mandiri also wants to enter Myanmar and Philippine.

In Malaysia, Mandiri International Remittance started operation since 2009 with 13 outlets. While trade cooperation between Malaysia and Indonesia improved 33.08 percent in the first quarter (Q1) this year, to US$4.42 billion, from $3.32 billion in Q1 last year. Indonesian’s export to Malaysia reached $2.14 billion in the period, a significant growth.

According to Muliaman, Bank Mandiri revised the first bank to receive a QAB license. Under the license, this state-owned bank will be treated on a par with the local banks operating in Malaysia.

“We highly appreciate the Malaysian banking authorities that support the presence of banks from Indonesia. Indonesia has also treated Malaysian banks as their own. This is a step forward that can strengthen relations between Indonesia and Malaysia, “said Muliaman.

Kartika added, Indonesian business activities have spread throughout ASEAN. This positive development, according to him, is one of the reasons why Bank Mandiri needs to be present in Malaysia.

“As a QAB licensed bank, we will operate in Kuala Lumpur to support business activities,” said Kartika.

To open a full branch in Malaysia, Bank Mandiri is preparing a capital of 300 million Malaysian Ringgit. “We have started with a capital injection of 50 million Malaysian Ringgit. This amount will continue to be added gradually, “said Kartika.

As a manifestation of Bank Mandiri’s commitment to become an ASEAN prominent bank, Bank Mandiri plans to continue to improve its overseas network. Currently Bank Mandiri has 7 overseas offices comprising 5 branches in Cayman Islands, Dilli Timor Leste, Hong Kong, Shanghai and Singapore, and 2 subsidiaries of Bank Mandiri Europe Limited in London and Mandiri International Remittance in Malaysia.

Bank Mandiri has been appointed by the Financial Services Authority (FSA) as a QAB from Indonesia to Malaysia on May 22, 2017. In the early stages, Mandiri operates two branches serving wholesale and retail banking business.

Governor of Bank Negara Malaysia, Dato ‘Muhammad Ibrahim said, the operation of Bank Mandiri in Malaysia shows the relationship between the two countries closer.

“I am confident that Bank Mandiri will be the first Qualified ASEAN Bank in Malaysia, a major milestone for financial integration in ASEAN. This is also a testament to the spirit of the true realization of ASEAN,” he said.

Dato Mohammad stressed it, the relationship between Malaysia and Indonesia extends beyond our geographical proximity but is bound by similarities in language, culture and of course – food. Businesses from both countries have also strongly committed to invest and contribute to each other’s socio-economic development.

He said, Malaysian companies have made significant investments in Indonesia, amounting to $12.1 billion at end 1Q-2017. These investments span the financial services, telecommunication and agriculture sectors.

Over the last few years, Indonesian firms have also started to increase their presence in Malaysia. A significant step forward came last month when our respective Trade Ministers announced a target for bilateral trade of $30 billion in the coming years. This is a doubling of $13.8 billion recorded in 2016.

“I strongly believe that this target is very much achievable and with the closer banking relationship our trade will further flourish,” He stated.

In 2014, Association of the Southeast Asian Nation members signed of the ASEAN Banking Integration Framework by ASEAN Central Bank Governors. Indonesia and Malaysia signed the bilateral ABIF agreement in August 2016.

Dato Mohammad adding, the operationalisation of the ABIF represents the dawn of a new era of banking relationship between Indonesia and Malaysia.

“Financial integration is a key agenda for the ASEAN region and will only intensify further in the future,” He stated by adding Bank Mandiri’s current scope of activities covering trade financing, SME and micro banking products is highly relevant towards advancing the interests of both Malaysia and the broader ASEAN region.

The entry of Bank Mandiri into Malaysia via the ABIF Framework would also provide an opportunity to further enhance the regional integration in payment systems between Malaysia and Indonesia.

The current collaboration between the ATM switches in Malaysia (MEPS) and Indonesia (ATM Bersama) to facilitate cross-border cash withdrawals can be enhanced to facilitate cross-border remittances leveraging on over 11,000 ATMs in Malaysia and 17,000 ATMs in Indonesia.

He said, this can be leveraged upon by both the Malaysian and Indonesian population including the diaspora groups to undertake safe and efficient cross-border remittances. Such collaboration can also be extended to facilitate retail payment card transactions via the domestic debit card schemes of both countries.

Bank Mandiri is the state-owned bank that provides services to customers covering Corporate, Commercial, Micro & Business, Consumer Banking and Treasury segments. Bank Mandiri currently has operating subsidiaries PT Mandiri Sekuritas, PT Bank Syariah Mandiri, PT AXA-Mandiri Financial Services, PT Mandiri InHealth, PT Bank Mandiri TASPEN Pos/Siap, Mandiri International remittance, Mandiri Europe, PT Mandiri Tunas Finance (and Mandiri AXA general insurance.

(Written by Linda Silaen, Email:


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