RANGOON — Burma’s Central Bank could be close to announcing a monetary policy in April or May, paving the way for private banks in the country to work with their overseas counterparts.
An official from the bank’s foreign exchange department said it would soon open the door for joint-venture applications.
“We will begin to accept applications for joint ventures after the policy goes into effect. In the meantime, interested banks may consult us about their future plans,” said the official.
The International Monetary Fund has been advising the government on the development of the policy, which will be based on the foreign investment laws passed in November of last year.
Any banks wishing to do business in Burma will have to submit data on their capital and detailed business plans, the Central Bank official said.
Banks taking part in the deals “will have to show how strong they are financially and a detailed working plan including what kind of services they will provide,” said the official.
The policy will include regulations on the scale of investment and what sectors they can invest in.
“At the moment, we will only allow foreign private banks to enter into joint ventures here. As for government banks, we will have to look at their offer thoroughly before we make the decision to accept their plan,” explained the official.
The World Bank has also reportedly been advising the Central Bank.
Bankers welcomed the move, saying the process should be completed before 2015.
“There are advantages and disadvantages to going into joint ventures,” said Thuya, a deputy general manager of state-owned Myanma Economic Bank. “Compared to foreign banks, private banks here lack both experience and finances. The shared system will mitigate some of the risks.”
There are currently 28 foreign banks operating in Burma, mostly from Southeast Asian countries.