CBM grants preliminary approval to nine foreign banks to operate in Myanmar

CBM has given “preliminary approval” to nine foreign banks to prepare for commencement of banking operations in Myanmar and they would be initially barred from retail banking business and would be subject to other constraints.—Photo: Aye Min Soe
CBM has given “preliminary approval” to nine foreign banks to prepare for commencement of banking operations in Myanmar and they would be initially barred from retail banking business and would be subject to other constraints.—Photo: Aye Min Soe

Yangon, 1 Oct — Nine foreign banks are granted preliminary approval by the Central Bank of Myanmar to operate in the country, according to the announcement of the CBM on Wednesday.
The bid-winning foreign banks are Australia and New Zealand Banking Group Limited (ANZ), Bangkok Bank, Bank of Tokyo-Mitsubishi UFJ (BTMU), Industrial and Commercial Bank of China (ICBC), Malayan Banking Berhad (Maybank), Mizuho Bank, Oversea-Chinese Banking Corporation (OCBC), Sumitomo Mitsui Banking Corporation (SMBC) and United Overseas Bank (UOB).
According to the announcement, the preliminary approval to prepare for commencement of banking operations is valid for 12 months during which the banks are required to fulfill their commitments and pledges made to the central bank, take all necessary measures to ensure functional banking operation from day one of business and will have to comply with requirements laid down by the Central Bank of Myanmar.
“Upon fulfillment of the above-stated, the Central Bank of Myanmar will grant the final license (to the winners) to operate in Myanmar,” the announcement said. This is the first time for Myanmar to allow the foreign banks to open 100-percent-owned branches inside the country in more than five decades.
There are 43 banks that have representative offices in Myanmar, of which 25 made proposals for their licenses.
Each foreign bank would be allowed to open a branch at only one location, to operate wholesale banking and to lend money to foreign investment companies and local banks.
The foreign banks would also be allowed to lend money to local companies through local banks or to lend a syndicated loan to local companies in cooperation with local banks.
They are not initially allowed to operate retail banking.  Each foreign bank is required to invest minimum US$ 75 million capital and some percent of its capital will be locked-in and it is not allowed to take all $75 million capital out of the country, said U Set Aung, Deputy Governor of the Central Bank of Myanmar.

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