Indonesia entered an unexpected central-bank leadership transition days after Bank Indonesia held its policy rate at 5.75%. In regulation, the EU clarified AI transparency requirements taking effect on 2 August, while the OCC rejected Wise’s application for a national trust bank. Separately, the ECB held its deposit rate at 2.25% and expanded its euro liquidity backstop for foreign central banks, while the PBOC scheduled CNY 2.1 trillion ($310 billion) of operations through its new overnight liquidity tool. Commerzbank also opened the door to takeover discussions after UniCredit secured a 47.6% stake. Read more on the week's key developments: 1. Bank Indonesia governor Perry Warjiyo resigns in surprise move Indonesia’s government announced on 27 July that Bank Indonesia Governor Perry Warjiyo had stepped down. State Secretariat Minister Prasetyo Hadi said President Prabowo Subianto had accepted the resignation, while Bank Indonesia’s board of governors appointed Senior Deputy Governor Destry Damayanti as acting governor on 26 July. Destry said Warjiyo resigned for personal reasons. The announcement came days after Bank Indonesia held its policy rate at 5.75%, following 100 basis points of increases since May to attract foreign capital and support the rupiah. Instead of raising rates again, Bank Indonesia lowered the cost of foreign-exchange hedging transactions with the central bank and encouraged greater use of non-dollar currencies to support the rupiah. Warjiyo’s mid-term departure adds uncertainty over Bank Indonesia’s leadership and whether his permanent successor will maintain its current policy stance. 2. OCC rejects Wise trust bank charter application, citing compliance deficiencies The US Office of the Comptroller of the Currency denied Wise's application to establish a national trust bank, citing supervisory and compliance deficiencies, while the cross-border payments company said changes to Federal Reserve account-access policy had undermined its proposed operating model. Wise applied in June 2025 to create a trust bank that could settle US dollar payments directly through the Federal Reserve, reducing its reliance on correspondent banks. The company plans to submit a new application under the GENIUS Act framework. Wise shares fell about 10% following the disclosure. Wise said it had strengthened its controls following a 2025 consent order cited by the OCC. The decision contrasts with recent OCC approvals for Circle, Ripple and BitGo, suggesting regulators remain willing to grant specialised federal trust charters where supervisory expectations are met. It also highlights how payment firms are pursuing banking charters, stablecoin frameworks and partnerships with incumbent banks as alternative routes into the US financial system. 3. EU clarifies AI transparency requirements ahead of 2 August start The European Commission published guidelines on 20 July clarifying transparency obligations under Article 50 of the EU AI Act, which apply from 2 August. Providers of systems designed to interact directly with individuals must ensure that users know they are engaging with AI unless this is already evident. Providers must also make certain AI-generated or manipulated content detectable in a machine-readable format. Deployers carry separate disclosure duties for deepfakes, emotion-recognition and biometric-categorisation systems, and some AI-generated text published on matters of public interest. Banks must identify which customer-facing AI systems fall within scope, determine which entity holds the provider role and incorporate disclosures into customer journeys. Those developing or offering AI systems under their own name may carry provider obligations alongside their responsibilities as deployers. While the guidelines are not binding, they clarify how the Commission interprets requirements that existing model-risk and customer-disclosure frameworks may not fully address. 4. ECB holds deposit rate at 2.25% and expands euro liquidity backstop The European Central Bank left its three policy rates unchanged on 23 July, keeping the deposit facility rate at 2.25%, the main refinancing operations rate at 2.40% and the marginal lending facility rate at 2.65%. A day later, it said foreign central banks could begin drawing on its revamped Eurosystem repo facility from the fourth quarter of 2026. Once onboarded, each participating institution will have standing access to up to EUR 50 billion ($57 billion) against high-quality euro-denominated collateral, priced at the ECB’s main refinancing operations rate plus a spread. The rate hold maintained the ECB’s policy stance amid uncertainty over inflation, energy prices and growth. EUREP addresses a separate external risk by providing foreign central banks with pre-arranged euro funding during periods of market stress, reducing the potential for shortages outside the currency area to disrupt euro-area markets. 5. UniCredit’s 47.6% stake prompts Commerzbank chairman to seek talks Commerzbank Chairman Jens Weidmann called for direct takeover discussions with UniCredit on 24 July after the Italian bank increased its holding to 47.6%, giving it substantial influence over shareholder votes. The move marked a shift from Commerzbank's previous opposition to a combination. UniCredit CEO Andrea Orcel said a day earlier that he expected Commerzbank to begin implementing UniCredit's proposed strategic roadmap from January 2027 and could seek board changes if it did not. Orcel also expressed willingness to discuss conditions with the German government and employee representatives. German regional officials have called for the preservation of Commerzbank's Frankfurt headquarters, employment and lending to small and medium-sized companies. Weidmann’s willingness to negotiate shifts attention towards the conditions that Commerzbank, German political leaders and employee representatives could seek if UniCredit proceeds. These are likely to include the location of the headquarters, employment, SME lending and Germany’s influence over one of its largest corporate banks. 6. PBOC schedules CNY 2.1 trillion operation through new overnight liquidity tool The PBOC said on 24 July that it would conduct CNY 2.1 trillion ($310 billion) of overnight reverse repo operations between 29 July and 3 August to meet short-term banking-system liquidity needs. It scheduled CNY 600 billion ($88.6 billion) for each of 29, 30 and 31 July, followed by CNY 300 billion ($44.3 billion) on 3 August. The operation marks the first large-scale use of the overnight reverse repo facility introduced in June, extending the PBOC's toolkit for managing short-term banking-system liquidity. Overnight repos more closely match the maturity of most interbank funding transactions, allowing the PBOC to calibrate liquidity around month-end, tax payments and government bond issuance. The shorter maturity gives the PBOC another instrument for managing temporary liquidity pressures alongside its existing seven-day operations. 7. Revolut wins Australian bank licence, commits AUD 400 million expansion The Australian Prudential Regulation Authority granted Revolut Payments Australia a licence on 21 July to operate as an authorised deposit-taking institution under the Banking Act 1959. APRA also licensed Revolut Australia NOHC as the group's non-operating holding company. The approval allows Revolut to introduce deposit and lending products alongside its existing payments and foreign-exchange services. The company, which has around 1.2 million Australian customers, said it would invest nearly AUD 400 million ($280 million) in the market over five years. The licence establishes its first regulated banking operation in Asia Pacific and brings eligible customer deposits within Australia's Financial Claims Scheme. Australia's highly concentrated banking market has historically proved difficult for both foreign entrants and domestic neobanks to disrupt. Revolut enters with greater scale than previous challengers, including an existing base of 1.2 million Australian customers and a profitable global business, making its expansion an important test of whether a digital-first bank can gain meaningful share from established incumbents. 8. Ant International raises $1.2 billion for global payments expansion Singapore-based Ant International completed a $1.2 billion Series A financing round. Ant Group and Alibaba Group participated alongside international institutional investors. The company has operated independently since 2024 and said its network connects more than 150 million merchants with over two billion user accounts across Asia, Europe, the Middle East and Latin America. The financing gives Ant International additional capital to expand outside China as a separately funded business. Its Alipay+, Antom, WorldFirst and Bettr platforms now span consumer payment connectivity, merchant acquiring, cross-border accounts, treasury and credit technology. The test will be whether Ant can convert the scale of its payment network into deeper enterprise relationships while navigating fragmented licensing regimes and competition from global payment networks, banks and fintech platforms. 9. RBI measures attract $20.7 billion in foreign-currency inflows Measures introduced by the RBI in early June attracted $20.72 billion in foreign-currency inflows by 17 July, according to the central bank's first update on the programme. Foreign Currency Non-Resident bank deposits accounted for approximately $17.4 billion of the total. The measures included support for banks raising longer-term non-resident deposits and other incentives intended to strengthen India's balance of payments as higher oil prices placed pressure on the rupee, which traded at around INR 96.24 to the dollar on 21 July. The inflows provide India with an additional foreign-currency buffer, although banks must manage the cost of swapping or hedging the deposits before deploying the funds domestically. Economists at Citi, HDFC Bank and IDFC First Bank said the RBI may have used part of the inflows to reduce its record $106.6 billion net short-dollar forward position. June data, due on 31 July, may indicate whether the central bank reduced its near-term forward liabilities. 10. South Africa, Nigeria and Ghana hold rates amid external pressures The South African Reserve Bank unexpectedly left its policy rate unchanged at 7.00% on 23 July, pausing after a 25-basis-point increase in May as it assessed the effects of higher inflation and earlier tightening. The Central Bank of Nigeria retained its monetary policy rate at 26.50% on 21 July, while the Bank of Ghana held its rate at 14.00%, pausing its easing cycle for a second consecutive meeting. The decisions came against shared pressure from volatile energy prices, currency risks and uncertain global funding conditions, although the three central banks entered the week from different policy positions. South Africa paused after tightening in May, Nigeria maintained restrictive settings to contain inflation and support the naira, while Ghana waited to assess the effect of substantial rate cuts delivered as inflation declined. What to watch Federal Reserve's FOMC meeting (28 to 29 July), Bank of England policy decision (30 July), Bank of Japan's policy meeting (30-31 July), Japanese banks’ Q1 fiscal earnings (July 31-August 3), Singapore banks’ Q2 earnings (6-7 August), Malaysian banks’ Q2 earnings (26-28 August) The Asian Banker Weekly Brief is a roundup of the biggest macroeconomic, industry and regulatory developments affecting banking globally.
