While the banking sector has not traditionally applied the competition policy strictly, the recent international trend is turning towards greater competition policy application. The uniqueness of banking has often inhibited countries from freely implementing the competition policy, but it is necessary to understand the backdrop of such considerations, and the context in which this has been changing.This paper looks at the manner in which competition policy has been limited in the banking sector, and how this was carried out. Relevant policy issues are discussed, before turning to the main topic of the paper, the Asian financial systems. In the research project of the FSA, the financial systems of several Asian countries were examined to comprehend the extent of competition policy being applied to banks. This paper abridges the findings of this project and hopes to convey the issues that arise from the full or partial application of the competition policy to the banking sector