Myanmar grants permission to 9 banks

YANGON: Myanmar has granted nine foreign banks, including three Japanese lenders and Australia’s ANZ, coveted licences to operate on a limited basis, the government’s biggest move to date to bring in much needed foreign capital to a fast growing economy.

The domestic banking sector remains ill-equipped to provide services to local citizens and global companies. While the licences are limited to one branch that can provide loans to foreign companies and only in foreign currency, they will provide the winning bidders a strong foothold in what investors and economists see as one of Asia’s most promising markets. Myanmar’s economy is expected to grow 7.75 per cent in the 2014-15 financial year from 7.3 per cent last year, International Monetary Fund (IMF) data shows.

“Given its size, economic potential and its strategic position between China and India, Myanmar is forecast to be one of the fastest growing economies in the region over the medium term,” Andrew Geczy, CEO of international and institutional banking for Australia and New Zealand Banking Group (ANZ), said in a statement.

The core banking units of Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group all gained licences - underscoring Japan’s growing investment and influence in a country that is home to big projects such as the Thilawa economic zone near Yangon. Also making the cut were the Industrial and Commercial Bank of China, Singapore’s Oversea-Chinese Banking Corp and United Overseas Bank, Thailand’s Bangkok Bank and Malaysia’s biggest lender Malayan Banking Berhard (Maybank).

The bidding process was open to around 40 international banks with representative offices in the country. Twenty-five banks applied.

“This process has taken a very long time and been incredibly competitive,” said Veronica O’Shea, a partner at law firm Herbert Smith Freehills in Singapore. “These banks were never expecting to get a full licence, as long as they can do a reasonable amount of commercial activity then they will be very happy,” she said.

US banks did not apply, as the United States maintains some sanctions on Myanmar. These measures include a Specially Designated Nationals List, a so-called black list that forbids US nationals or companies from doing business with persons or entities listed. By contrast, the European Union, Australia and other countries have lifted sanctions in response to widespread political and economic reforms initiated by the reformist, semi-civilian government that took over from a military junta in March 2011.

 The foreign banks will be allowed to lend to local institutions - a cooperation which is expected to encourage domestic outlets to improve their operations and cut down on corruption. The tight restrictions are aimed a giving local banks time to grow, but some analysts said local businessmen, in dire need of capital, would benefit from foreign lenders.

Reuters

http://gulftoday.ae/portal/7098b5fe-b18f-4ff5-ba48-84c85997ec85.aspx?


Leave your comment below

 

DVB Multimedia Group

RFA Home

Asia - Voice of America

Follow by email

Most Reading

e859638055da3b665f41448d1c0534e9