RANGOON — The Central Bank of Myanmar (CBM) announced on Saturday that it had granted licenses for four more foreign banks from Asia.
The institutions awarded in the March 4 selection include the Bank for Investment and Development of Vietnam (BDIV), the E. Sun Commercial Bank from China, South Korea’s Shinhan Bank and the State Bank of India.
The applicants for this second round of licenses came from within a pool of 13 total competitors, including banks from Taiwan and Mauritius.
According to the Central Bank announcement, the preliminary approval they have been granted is valid for 12 months. During this time, successful applicants will have to fulfill commitments made in their applications, ensure functional banking operations and comply with the Central Bank’s requirements.
Thein Tun, chairman of the Tun Foundation Bank, said that foreign financial institutions now number more than half of the 25 private banks in Burma.
“Even though the government still doesn’t allow retail banking [by foreign institutions], what I want is that they promote local banks more,” he said. “Most [local banks] can’t make profits to compete with [foreign banks],” he said. “I am concerned that local lenders will lose the game after more foreign banks come in, wherever they are coming from.”
The Central Bank is still placing heavy restrictions on foreign bank operations—they are only permitted to engage in wholesale banking with investors from their respective countries, and can open only one branch in Burma.
Zaw Lin Htut, chief executive officer of the Myanmar Payment Union said that he hopes the new licensing will boost trade from the countries in question, but acknowledged that many restrictions still hinder success.
“Limited operations and no clear definite instructions [by the CBM] are the difficulties facing them,” he said.
In the first round of selection in 2014, nine banks from China, Australia, Thailand, Malaysia, Singapore and Japan were awarded licenses by the Central Bank.