ASEAN Countries Prioritise Financial Inclusion, ESG

April 13, 2022
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The eighth joint meeting of the Association of South-East Asian Nations (ASEAN) finance ministers and central bank governors has been convened virtually, with praise for progress made on payment services among the ten member states.

The eighth joint meeting of the Association of South-East Asian Nations (ASEAN) finance ministers and central bank governors (AFMGM) has been convened virtually, with praise for progress made on payment services among the ten member states.

ASEAN, the political and economic union established between countries such as Singapore, Thailand and Indonesia, has released a communique outlining its progress and priorities for financial services and the economy.

Economic integration is one of the core issues for the trading bloc.

Among the developments discussed at the meeting, which was chaired by Cambodia’s finance minister, was the launch of the linkage of the Real-Time Retail Payment Systems (RT-RPS) of Singapore and Thailand in 2021.

Launched in April, the world’s first cross-border RT-RPS linkage was welcomed by the trading bloc. It means that customers of participating banks can transfer funds of up to S$1,000 or THB25,000 (around $740) daily across the two countries, using just a mobile number.

The meeting also greeted the launches of bilateral cross-border QR code payment linkages between Indonesia and Thailand, Indonesia and Malaysia, Malaysia and Thailand, Singapore and Thailand, Thailand and Vietnam, and Cambodia and Thailand, as well as the upcoming linkages between Malaysia and Singapore, and the Philippines and Singapore.

The end goal is for the ASEAN to position itself globally as “at the forefront of retail payments connectivity”, according to the communique.

Sustainable finance is also on the agenda for the nations, with the trading bloc in the process of creating a taxonomy for environmental, social and governance (ESG) finance in the region.

The taxonomy is being managed via a principles-based foundation framework that will allow the trading bloc to pursue its sustainability agenda in a way that reflects its individual circumstances.

“The Meeting welcomed the approach of the ASEAN Taxonomy that is inclusive, transparent, practical and facilitative, while providing rigorous pathways that are consistent with regional and global sustainability ambitions,” said the communique.

Going forward, there will be a consultation on the taxonomy so far, which will contribute to future taxonomies created by the ASEAN.

Another issue that the ministers and governors discussed was financial inclusion.

The trading bloc said that it will continue to advance financial inclusion by increasing financial access, usage and quality of financial services for the people in ASEAN.

Based on the national data from the member states, the average number of adults across the region with a financial account was 72.1 percent.

This surpasses the 2025 target of 70 percent as set out in the Strategic Action Plans for Financial Integration.

Meanwhile, all ASEAN members have now established a national financial inclusion or financial education strategy/blueprint to support their national financial inclusion strategy and implementation plans.

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