Myanmar to open banking sector to ten more foreign lenders
Myanmar plans to issue up to ten new licenses to foreign banks to commence retail operations in the country from 2021. The move is part of the banking sector liberalisation spearheaded by the Central Bank of Myanmar.
In the third phase of the process, announced in November 2019, the banking regulator will issue foreign banks with representative offices in Myanmar with either a branch license or a subsidiary license. The licensees will be permitted to offer their services to both local and foreign financial institutions in addition to local and foreign corporations and take deposits from and grant loans for companies, banks and individuals in foreign currency and in Myanmar kyat.
According to the announcement, the licensees would need to contribute to the improvement and expansion of the domestic banking sector by participating in the interbank market, lending to domestic banks, increasing financial education of individuals, engaging in foreign currency exchange and similar activities.
A branch licensee will be required to have minimum paid-in capital of $75 million, out of which $40 million would be locked up interest-free at the central bank for a minimum of two years.
Subsidiary of a foreign bank requires $100 million equity capital
A subsidiary licensee will have to maintain a minimum paid-in capital of $100 million and will be allowed to offer services to customers starting from January 1, 2021. The subsidiary licensees will be allowed to establish up to ten branches or off-site ATMs.
Among the first banks that expressed their interest in a banking license under these conditions in Myanmar is Thailand’s Siam Commercial Bank which wants to upgrade its representative office in Yangon to a bank subsidiary.
In the past, 13 foreign banks have been awarded provisional licenses to open a branch in Myanmar. In 2014, the central bank granted a permit to nine bidders from Australia, Japan, Singapore, China, Thailand and Malaysia. In 2016, overseas banks from Vietnam, South Korea, Taiwan and India were also awarded permits.
Myanmar plans to issue up to ten new licenses to foreign banks to commence retail operations in the country from 2021. The move is part of the banking sector liberalisation spearheaded by the Central Bank of Myanmar. In the third phase of the process, announced in November 2019, the banking regulator will issue foreign banks with representative offices in Myanmar with either a branch license or a subsidiary license. The licensees will be permitted to offer their services to both local and foreign financial institutions in addition to local and foreign corporations and take deposits from and grant loans for...
Myanmar plans to issue up to ten new licenses to foreign banks to commence retail operations in the country from 2021. The move is part of the banking sector liberalisation spearheaded by the Central Bank of Myanmar.
In the third phase of the process, announced in November 2019, the banking regulator will issue foreign banks with representative offices in Myanmar with either a branch license or a subsidiary license. The licensees will be permitted to offer their services to both local and foreign financial institutions in addition to local and foreign corporations and take deposits from and grant loans for companies, banks and individuals in foreign currency and in Myanmar kyat.
According to the announcement, the licensees would need to contribute to the improvement and expansion of the domestic banking sector by participating in the interbank market, lending to domestic banks, increasing financial education of individuals, engaging in foreign currency exchange and similar activities.
A branch licensee will be required to have minimum paid-in capital of $75 million, out of which $40 million would be locked up interest-free at the central bank for a minimum of two years.
Subsidiary of a foreign bank requires $100 million equity capital
A subsidiary licensee will have to maintain a minimum paid-in capital of $100 million and will be allowed to offer services to customers starting from January 1, 2021. The subsidiary licensees will be allowed to establish up to ten branches or off-site ATMs.
Among the first banks that expressed their interest in a banking license under these conditions in Myanmar is Thailand’s Siam Commercial Bank which wants to upgrade its representative office in Yangon to a bank subsidiary.
In the past, 13 foreign banks have been awarded provisional licenses to open a branch in Myanmar. In 2014, the central bank granted a permit to nine bidders from Australia, Japan, Singapore, China, Thailand and Malaysia. In 2016, overseas banks from Vietnam, South Korea, Taiwan and India were also awarded permits.
