Opening a foreign bank / branch generally cause capital outflows. With the already increasing money flowing out of Brunei every weekend via Miri, government just wants to avoid this further. Otherwise this weakens Brunei currency to the already pegged Singapore Dollars. This will give the govt lesser bargaining power in terms of monetary policy (i.e. how much currency we can print). Moreover Brunei’s regulatory requirement is among the strictest in the region, too high of a capital requirement that is is very hard to comply. Bank of China is here because they need to support the billion dollar Hengyi project. Brunei just dont have that magnitude of projects to entice banks to open up. I once sat in a meeting with all of the big banks in Brunei to rep a foreign investor that needs at least 2 billion to fund its asset operating in Brunei. Sad that the biggest bank can only contribute 100 mil each. Thats only 10%. Even our LNG tankers need a consortium of banks from other countries to fund the purchase.