The International Monetary Fund (IMF) has urged Myanmar to control the issuing of banking licences to minimise risks with the pending arrival of foreign banks to the country.
The IMF mission chief Matt Davies said on June 17 that the issuance of new domestic licenses must be carefully controlled in order to allow regulation and capacity to develop.
Myanmar formed a foreign bank selection board in May 2014 which is chaired by officials from the Ministry of Finance, the Attorney General’s Office and senior members of the Central Bank of Myanmar.
They have yet to give the green light to allow foreign banks to operate and it is currently drafting the banks and monetary law with the help of the World Bank.
“Foreign banks have technologies and huge capital. For instance, the local banks are unable to disburse loans to small and medium sized enterprises. I think the foreign banks can solve this problem to a certain degree,” said one entrepreneur.
As current chair of the Asean bloc of nations, Myanmar will help set the stage for the ASEAN Economic Community which will allow the free flow of goods and capital across regional borders.
However, some local bankers feel worried that if foreign banks are allowed to open this will undermine smaller local ones that have only just been allowed to operate.
Source: Myanmar ELEVEN