Parliament passes Financial Institutions Law

After years of back and forth, the Banks and Financial Institutions Law of Myanmar has been passed by parliament and is now awaiting the president’s signature, with banks to face more stringent rules on raising paid-up capital and on reserve requirements.

Lenders will have to keep 5 percent of customer deposits as cash with the Central Bank, despite petitioning the regulator to enforce a lower reserve requirement.

Banks were previously required to hold 10pc, but 75pc of that could be made up of Treasury bonds.

The new law also stipulates a minimum capital requirement of K20 billion.

Some in the financial sector are concerned that small banks will struggle to meet the reserve requirement.

However, while the Central Bank did not agree to bankers’ requests for a softer policy, the regulator will not implement penalties as strictly as it had previously indicated, said U Mya Than, chair of Myanmar Oriental Bank.

“It seems the Central Bank want banks to meet

Source: Myanmar Times

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