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China revises loan prime rate mechanism; Malaysia eases forex policy

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China revises loan prime rate mechanism; Malaysia eases forex policy

GREATER CHINA

* The People's Bank of China is reforming the formation mechanism used to establish the loan prime rate, a move aimed at lowering borrowing costs for companies, Reuters reported. Chinese banks will now use rates of open market operations to determine their new LPR quotations, the PBOC said in a statement published on its website.

* Bank of Shanghai Co. Ltd. said it obtained approval from the China Banking and Insurance Regulatory Commission to increase its registered capital to 14.21 billion yuan from 10.93 billion yuan. Further, the regulator approved the lender to issue up to 20 billion yuan of Tier 2 bonds. The debt offering is still subject to the approval of the People's Bank of China.

* Cathay Financial Holding Co. Ltd. plans to raise NT$20 billion by issuing new common shares, subject to shareholder and regulatory approvals, the Taipei Times reported. Cathay Financial President Lee Chang-ken said the company is preparing to strengthen its financial structure amid increased market volatility due to the US-China trade dispute and implementation of new International Financial Reporting Standards.

JAPAN AND KOREA

* Japan's Orient Corp. and Tochigi Bank Ltd. formed a business tie-up that promotes the use of Chinese electronic payment service Alipay, as part of their effort to boost inbound services targeting Chinese visitors and promote cashless payments, The Nikkei reported.

* Industrial Bank of Korea said it will launch its Indonesian subsidiary in September after having won approval from Indonesian regulators to merge PT Bank Mitraniaga Tbk and PT Bank Agris Tbk, The Korea Times reported.

* South Korea's Financial Supervisory Service plans to conduct an investigation into Woori Bank and KEB Hana Bank over their alleged mis-selling of derivatives-linked funds, which could potentially result in huge losses for investors, The Korea Times reported. The investigations are expected to commence later this week.

* Bank of Yokohama Ltd. President Yasuyoshi Oya and Chiba Bank Ltd. President Hidestoshi Sakuma said the two lenders are open to the possibility of setting up a jointly operated branch in Tokyo, Jiji Press reported. The heads also stated that the banks would collaborate to gain new customers from the Japanese capital as well as from overseas markets.

ASEAN

* The Bank of Thailand is considering a property developers' proposal to relax the loan-to-value limits for joint mortgages, Post Today reported, citing Ronadol Numnonda, deputy governor for financial institutions stability. The relaxed rule would only apply to co-borrowers who do not have ownership in the property, Ronadol said.

* Bangkok Commercial Asset Management PCL is planning to sell up to 1.77 billion shares in its proposed IPO, Bloomberg News reported, citing a regulatory filing. The company said majority owner Bank of Thailand will offer up to 1.48 billion shares, and the remaining shares to be offered will be new shares.

* Thai Life Insurance PCL will acquire a 35% stake in Myanmar's Citizen Business Insurance in a deal that would make it the first insurer based in the Association of Southeast Asian Nations to venture into the country, Bangkok Post reported, citing a statement.

* Indonesia's PT Bank Central Asia Tbk is planning to partner with Chinese payment platforms WeChat and Alipay once it receives the green light from the central bank to do so, The Jakarta Globe reported. Bank Indonesia said it has so far received applications from three banks for licenses to conduct business with the payment platforms.

* Bank Indonesia officially launched a standard for quick-response codes, known as the QR Code Indonesian Standard, which will allow users to use the same QR code across different electronic payment platforms, The Jakarta Globe reported. The new standard will take effect Jan. 1, 2020. The move is expected to boost financial inclusion and integration among payment providers.

* Bank Negara Malaysia further liberalized its foreign exchange administration policy, effective Aug. 30, to give investors more flexibility in trading. Under the revised guidelines, residents will be allowed to hedge their foreign currency current account obligations up to the underlying tenure. Also, domestic treasury centers will be allowed to hedge on behalf of their related entities via a licensed onshore bank.

SOUTH ASIA

* India's Ujjivan Small Finance Bank Ltd. is seeking to list its shares through a 12-billion-rupee IPO, The Hindu reported. It may consider selling 3 billion rupees of shares in a placement prior to the IPO.

* India's Enforcement Directorate filed the first prosecution complaint in connection with a money laundering case involving Infrastructure Leasing & Financial Services Ltd., the Press Trust of India reported. The complaint sheet was filed under provisions of the Prevention of Money Laundering Act, charging Aircel Ltd. founder C. Sivasankaran and five other IL&FS senior executives.

* Bank of India is hoping to recover 25 billion rupees as the lender sees the resolution of up to 10 cases in the National Company Law Tribunal relating to nonperforming assets within the second and third quarters, the Press Trust of India reported, citing CG Chaitanya, a senior executive of the bank.

* The Pakistani government has named Aamir Khan the new chairman of the Securities and Exchange Commission of Pakistan, effective immediately, after the federal cabinet approved the appointment Aug. 9. Khan is replacing Farrukh Sabazwari, who will continue to serve as commissioner, Dawn reported.

AUSTRALIA AND NEW ZEALAND

* Global asset manager Kohlberg Kravis Roberts & Co. LP has employed the services of boutique firm Reunion Capital Partners ahead of an IPO of specialty finance company Pepper Group Ltd., which is looking to raise up to A$1 billion, The Australian Financial Review reported. The firm is expected to oversee the appointment of investment banks and manage the offer process.

* The Australian Prudential Regulation Authority is looking for a candidate to the role of executive general manager following Pat Brennan's sudden resignation from the position after eight years at the regulator, The Australian Financial Review reported. APRA will likely search for an external candidate to fill the vacancy, the publication noted.

* Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. will be at a hearing by the Australian Securities and Investments Commission to warn the agency that they may not have the resources needed to comply with the regulator's proposal to increase verification requirements for loan applications, The Australian Financial Review reported. The banks believe that the planned revisions would increase costs and would result in an "extremely difficult and imprecise process."

Janna Estares, Sally Wang, Sarun Saelee, Cathy Hwang, Emi White and Aditya Suharmoko contributed to this report.

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