July 18, 2011 / 8:31 AM / 8 years ago

Malaysia may allow foreign banks open more branches

JAKARTA, July 18 (Reuters) - Malaysia may allow Southeast Asian banks to open more branches there in the future as it aims to further liberalise its financial sector, the country’s central bank said on Monday.

Malaysia has restricted the number of branches a foreign bank can open there as it wants banks to open not only in urban areas, but also in rural areas, to reach small businesses.

“Going forward, this number will be increased aggressively, for now it is eight,” governor Zeti Akhtar Aziz told reporters in an Islamic finance conference in Jakarta.

Bank Mandiri , Indonesia’s largest bank owned by the state, has said it wants to expand to Malaysia, where about 2.2 million Indonesian migrant workers are employed.

Aziz also said any disruptions in international financial markets had affected Islamic finance to a “lesser extent” as it was linked more closely to economic activities, therefore taking less risks in return for profits. (Reporting by Aditya Suharmoko; Editing by Lincoln Feast)

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