Major banks operating in Asia are expecting their regional heads to devote more time to build relationships with regulators - who have recently become "major stakeholders" in businesses - amid changing laws and an increasing number of probes into the banking sector.

Reuters reported that banks operating in Asia are becoming more diplomatic amid a number of regulatory probes over their hiring of relatives of government officials, and rate manipulation in Singapore.

The probes and new rules brought in after the global financial crisis have worsened the relationship between Asian regulators and the banks, who are trying to solve the issue. Banks now expect their Asian heads to devote more time to building their relationships with financial watchdogs.

"Regulators have become major stakeholders - as important as big corporate clients - so firms are recognising how key they are for business," Reuters quoted Judy Vas, regulatory leader for Ernst & Young's financial services business in Asia, as saying.

Banks such as Barclays and JPMorgan have recently appointed country heads in Singapore to effectively manage regulatory relationships in the city state.

Barclays recently promoted its Asia head of tax, Li Li Kuan, to become country head for Singapore, while JPMorgan brought in former DBS Vickers boss Edmund Lee as its Singapore head last year, replacing Philip Lee.

Goldman Sachs, UBS and HSBC have also improved their government affairs offices with additional hiring.

The firms, who had been focusing less on regulatory or government affairs in Asia, have now started building offices dedicated to such matters.