RANGOON — Two Japanese and one Singaporean bank will become the first foreign banks to operate in Burma for decades when they open branches on April 23, as the country emerges from a long phase of economic isolation, state media reported Thursday.
“The Bank of Tokyo Mitsubishi UFJ Ltd [BTMU], Sumitomo Mitsui Banking Corporation [SMBC] and Oversea-Chinese Banking Corporation Ltd became the first to clear the final hurdle among nine foreign lenders awarded preliminary approval,” the state-backed Global New Light of Myanmar newspaper reported.
Crippled by mismanagement during 49 years of military regimes and cut off from much of the world due to Western sanctions, the domestic banking sector remains ill-equipped to provide services to local citizens, let alone global companies.
A semi-civilian government took power in 2011 and has initiated sweeping economic reforms. In October, the government granted nine foreign banks coveted licenses to operate on a limited basis, its biggest move to date to bring in much needed foreign capital to a fast-growing economy.
The licenses are limited to one branch that can provide loans to foreign companies and only in foreign currency, and the licensees are also expected to lend to domestic banks.
Sumitomo has partnered up with the local bank KBZ, the newspaper reported.
Mitsubishi UFJ is a unit of Mitsubishi Fnancial Group Inc, and Sumitomo Mitsui is a unit of Sumitomo Mitsui Financial Group Inc.
Burma’s Central Bank said on April 2 that it expected the remaining six foreign banks to submit applications for their final licenses in the coming months.
The remaining six banks are: the Australia and New Zealand Banking Group Ltd, Bangkok Bank, the Industrial and Commercial Bank of China (ICBC), Malayan Banking Berhad, Japan’s Mizuho Bank, and Singapore’s United Overseas Bank.
Mizuho Bank is a unit of Mizuho Financial Group Inc.