Japan & Singapore big winners in foreign banking licence award

9 foreign banks have been awarded preliminary Foreign Banking License on 1^st October 2014. The award of the banking licence also shows the influence that the countries that the banks come from – in financing development and trade in Myanmar with the rest of the world.

The big winner is Japan with 3 banking licences. Not surprising given the level of Japanese government aids and the investment by the Japanese government and private sector companies such as Mitsubishi, Marubeni and Sumitomo in Thilawa SEZ.

Singapore comes in second with 2 banking licences. Singapore is an important financial and commercial hub in Asia – and its banks, law firms, accounting, architectural and consulting firms play a big role in the Myanmar economy.

China, Thailand, Malaysia and Australia each get 1 banking licence.

Visibly absent were Standard Chartered Bank, DBS Bank (S E Asia’s largest bank) and Korean banks.

Standard Chartered which decides to withdraw its bid for unannounced reasons even though it has a 4 man rep office in Yangon.

DBS Bank has been a bit of a laggard in Myanmar compared to UOB or OCBC – both of which have long history in Myanmar. However early this year DBS finally opened a rep office in Yangon which may be too little too late.

Given the growing level of trade and investment by Korean companies in Myanmar it was surprising that no Korean bank was awarded a licence.

Source: Myanmar Central Bank

The preliminary licence is valid for 12 months during which the successful applicants will have to fulfil the commitments made in their RFP application.

Author: Andrew Tan – Managing Director, Consult-Myanmar Co Ltd

This report was also carried by Asian Banking and Finance website.