With some foreign banks expected to begin operating in 2014, bankers are increasingly looking to the government and finance organisations to get them up to speed
Despite continued efforts on the part of local banks to upgrade services ahead of the anticipated inclusion of foreign competition, bankers claim that they will require outside help in order to increase capacity building and training that would keep them competitive.
Some local banks are looking to international finance corporations for training and assistance, while the Central Bank is currently considering how to allow foreign banks entry into the Myanmar market, banking sources said.
U Sein Maung, chairperson of First Private Bank, said commercial banks had just two years’ exposure to international operations.
“Our experience is very recent and our staff is very weak in technical skills,” he said, adding that while foreign banks offer hundreds of services, domestic banks offer very few.
Foreign currency trading, debit cards including the MPU card, and automatic teller machines have been available in Myanmar since 2012 for some banks, but those services are still few and far for most banks, who are awaiting the entrance of foreign players next year that could include MARUHAN Japan Bank, Singapore-based DBS Bank and Malaysia’s CIMB Bank Berhad.
Currently, banks are struggling to modernise services as much of the country is still unable to access banking services while trained staffers are still hard to come by.
Japan’s Sumitomo Mitsui Banking Corporation and the Myanmar Banks Association signed an agreement to develop professional education programs for domestic bankers starting in January, they announced on December 17.
U Thein Tun, a senior member of the MBA and chair of Tun Foundation Bank, said the agreement should lead to further economic cooperation between the two countries, especially in the banking sector.
“We are discussing the entry of foreign banks. It will definitely come one day, but our banks are still young and need to build up their capacity,” he said, adding that even if Myanmar’s 25 commercial banks were to merge, their joint capital would not equal those of a single branch of a major international bank.
Kanbawza Bank’s vice president U Than Lwin said commercial banks needed technical assistance and training if local banks are going to survive in the market.
“We need to protect ourselves, but we can’t acquire international expertise without cooperating with them,” he said.
Some foreign banks are looking for joint ventures with local counterparts, while others want to open their own branches, said U Than Lwin.
“We need the cooperation of foreign banks. At the same time, if they want to get involved in retail banking, they also have to rely on us because we have so many branches here.”
An official of Myanma Economic Bank said state-owned banks, meanwhile, are finding it hard to rival commercial banks in offering a wide range of services.
Some private banks can bring in foreign experts to train their staff and access more capital, but this was not easy for state-owned banks, he said.
“In the long run, private banks will probably move ahead faster than us. We will go step by step,” he said.
The Central Bank’s training program brings in expertise not just from Japan, but also Thailand and Singapore, he said. “We will acquire more banking knowledge, while preparing for cooperation later,” he said.
Source: Myanmar Times