NAYPYIDAW — The Central Bank of Myanmar has announced that it will issue a second round of licenses to foreign banks, possibly before the next government takes office at the end of March.
Monday’s announcement said that new licenses would be offered to banks based in neighboring countries and Burma’s important trading partners, with priority given to institutions that already had representative offices in the country or were in the process of establishing one.
Banks based in countries with institutions which had already won licenses in 2014—including Australia, Japan, Malaysia, China, Singapore and Thailand—will not be permitted to compete in the current licensing round.
Nine foreign banks are currently operating in Burma under stringent conditions. Each are prevented from competing in the retail banking sector against local lenders and are only permitted to operate a single branch.
Chit Khine, chairman of the Myanmar Apex Bank, said that the introduction of more foreign operators was a welcome development but questioned the timing of the licensing process, which will coincide with the incoming parliament and transfer of power to the next government.
“It’s still too early to issue more licenses for foreign banks, as they can’t operate much in the local market with their restrictions—they are not able to lend money to people,” he added. “Foreign banks can only work for their countries here. If they want to work here, at least, they will have to deal with local banks, that’s why their operations have not increased in size over the last year.”
Among the 25 foreign banks who competed for licenses last year, all nine winners are based in the Asia-Pacific. They are the Industrial and Commercial Bank of China, Australia’s ANZ Bank, the Bangkok Bank, Malaysia’s Maybank, the United Overseas Bank and Oversea-Chinese Banking Corporation of Singapore, and Japanese lenders Bank of Tokyo Mitsubishi, Sumitomo Bank and Mizuho Bank.
Central Bank deputy governor Sett Aung was unavailable for comment on Tuesday, with his staff telling The Irrawaddy he was currently out of the country.