Foreign banks with representative offices in Myanmar have been invited to submit “expressions of interest” to the Central Bank of Myanmar, the first step in allowing foreign banks to operate in Myanmar, according to officials.
Letters requesting “expressions of interest” were sent out earlier this month and are due on May 30, said a Nay Pyi Taw-based CBM official who requested anonymity due to the issue’s sensitivity.
“We sent letters to all [foreign] representative offices to reply with expressions of interest, which means they are interested in applying for a licence to open here,” the official said, while declining to disclose further information about the process.
Under the 1990 Financial Institution Law, foreign banks can open local subsidiaries or full branches, but the Myanmar Companies Act prevented foreign banks from opening.
A new Financial Institution Law is in the works, with a review by the Attorney General’s office recently completed, and is expected to implemented during the permissions process for foreign banks, the Central Bank official said.
Some 35 different foreign banks have opened representative offices in Myanmar, with particular interest from Asian countries such as Japan, Korea and Singapore. They are currently prevented from engaging in many banking activities.
Yangon representatives of several large foreign banks declined to directly discuss the licensing process with The Myanmar Times, claiming they had agreed to non-disclosure measures, but confirmed the process requesting expressions of interest finishes up on May 30.
The introduction of foreign banks remains a controversial issue in Myanmar, with some saying it will improve Myanmar firms’ access to capital and others claiming foreign firms will out compete local banks. – Additional reporting Jeremy Mullins
Source: Myanmar Times