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Myanmar central bank revokes licence of local bank

The Central Bank of Myanmar announced on Monday announced that it is revoking the banking licence of locally incorporated Asia Yangon Bank Ltd (AYB).

The central said in its announcement that the revocation is for “breaching the country’s existing laws” but did not provide any further details on the matter.

Since the announcement, the central bank has taken over management of AYB and made arrangements to allow customers who wish to do so to withdraw money their money during normal banking hours.

Attempts to contact central bank officials for clarification on the matter have been unsuccessful as of press time Tuesday.

Reached by the Myanmar Times, AYB Chair U Myo Paing said, “At present, I don’t want to say anything about the CBM announcement, but I will make it public when it’s necessary.”

This only the third time the banking licence of a local bank has been revoked. In 2005, CBM revoked the licencses of Asia Wealth Bank, owned by U Aik Htun, and May Flower Bank, owned by U Kyaw Myint, for allegedly being involved in money laundering.

The directors of AYB are Daw Naing Myo Min Nu, U Myint Swe, U Myo Paing aka U Chain Shein, U San Tin, U Tin Pe and U Tun Win, according to company registration data from the Directorate of Investment and Company Administration (DICA).

“The central bank can withdraw the licences of banks for various reasons. Among them are for being poorly managed, violating specific rules, and being involved in money laundering. Previously, the licences of Asia Wealth Bank and May Flower banks were withdrawn. With AYB, only the Central Bank of Myanmar knows the reason for the licence revocation right now. In other countries, small banks that do not obey rules are often closed and bigger banks, whose closures could affect many people, are punished seriously,” said U Than Lwin, a retired deputy governor of the CBM.

AYB, which was founded some 20 years ago is headquartered in Botahtaung, Yangon, and has branches in Bayintnaung, Lewe, Mandalay, Taungoo, Monywa, Magwe, Pathein, Pyay and Minbu.

In July, 2017, the CBM introduced rules requiring banks to submit reports on large debts, amended the way bank liquidity ratios are calculated, changed loans offered by banks to fixed-term loans, and tightened regulations on types of assets banks can hold. Specific guidance was also issued for the qualifications of the members of the board of directors of banks, with banks instructed to adhere to the standards when appointing members to their board of directors. – Translated

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Source: Myanmar Times

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