A new payment system to facilitate international business transactions could be in use in 2017, the Japan International Cooperation Agency (JICA) announced last week.
Central Bank deputy governor U Set Aung and JICA Myanmar’s chief representative Tanaka Masahiko signed the agreement to modernise the funds payment and securities settlement systems on February 4.
“We have to complete the system in 2016 and start in 2017,” said a central bank official who asked not to be named as he is not authorised to speak to the media.
As the government tries to establish a modern banking system and a securities market to increase foreign investment and trade, the new system for interbank trading will play a central role, industry experts have said.
The payment and settlement system in domestic banks is now done manually, which takes up staff time and causes delay, banking sources said, adding that much of the work is done by hand and by using dated paper storage techniques.
Banks also tend to use locally made software that is unable to process a number of requests and does not work for settlements, he said.
Experts worry systems that are currently incompatible with international systems will make it difficult for the sector to integrate with the outside world.
The new financial information and communication technologies (ICT) work in real time to ensure timely transactions by using digital scanning for cheque clearance, said the central bank official.
Japanese and other delegations that visited Yangon in late 2013 criticised weaknesses in the banking infrastructure as a barrier to doing business.
U Zaw Lin Htut, deputy managing director of Kanbawza Bank, said the new system would ease cash flows. “We will be able to check the payments online and inform customers very quickly about their status,” he said.
Source: Myanmar Times