Yangon – The Myanmar Government has allowed nine foreign banks to open branch office in Myanmar including two Singaporean banks that provided financial services between Myanmar businesses and foreign countries during the decade under the U.S. sanction.
“We chose these banks based on how much they can contribute to Myanmar’s economy,” said U Kyaw Kyaw Maung, Governor of Central Bank of Myanmar.
The nine banks that won the tenders to operate in the country are authorized to operate one single branch in the country and will need to provide an initial investment amount of US$ 75 million. In addition, a certain percentage of that money must be deposited in the Central Bank to prevent these banks from suddenly withdrawing from Myanmar.
These banks are authorized to provide financial services to foreign investors only. Should they want to lend to local businesses, they will have to do so via local banks, said U Sett Aung, Vice Governor of Central Bank of Myanmar.
There are 42 banks that have representative offices in Myanmar. Out of them, only 29 banks applied to operate branches in the country. 25 out of them submitted Expression of Interests, so the Central Bank adopted a point system to choose among these banks, said Governor Kyaw Kyaw Maung.
The authorized banks are three biggest banks from Japan—Tokyo-Mitsubishi UFJ Bank, Mizuho Bank, Sumitomo Mitsui Bank, Australia’s ANZ Bank, China’s ICBC Bank, Singapore-based OCBC Bank and UOB Bank, Thailand’s Bangkok Bank, and Malaysia’s May Bank.
“All of the authorized banks have long opened representative offices here,” said Assistant Executive Director from Myanmar Apex Bank, U Kyaw Soe Min.
The Japanese banks will face obstacles kicking off their operation right away. They will not be able to provide full banking services due to the existing U.S. sanction on Myanmar, said U Ye Min Aung, Secretary General at Myanmar Rice Federation.
“We authorized three Japanese banks to operate because they fit our requirements,” said U Sett Aung.
UOB Bank and OCBC Bank are among the biggest banks in Singapore and are also influential in the world. They also provided financial services to Myanmar businesses for international transactions during the U.S. sanction period.
Malaysia’s May Bank has been providing remittance services to Myanmar.
“The Japanese banks are most likely to lend heavily to investors in Thilawa,” said U Ye Min Aung.