Central Bank Says 13 Foreign Banks Vying for Operating Licenses
By Kyaw Hsu Mon 9 February 2016
RANGOON — The Central Bank of Myanmar announced on Tuesday that 13 foreign banks have applied to operate in Burma in a second round of licensing.
In the announcement, which came a day after the Feb. 8 application deadline, the Central Bank said that the final decision would be made by March 31, the final day of President Thein Sein’s administration.
Contenders in the second licensing round include the Bank for Investment and Development of Vietnam; Taiwan’s Cathay United Bank, CTBC Bank, E.SUN Commercial Bank, First Commercial Bank and Mega International Commercial Bank; South Korea’s KB Kookmin Bank and Shinhan Bank; the State Bank of India; the State Bank of Mauritius; Taiwan Business Bank; Taiwan Cooperative Bank; and Taiwan Shin Kong Commercial Bank.
The announcement said that unsuccessful applicants from the previous round of licensing were eligible to participate in the final stage of the process. Following the preliminary approval of licenses will be an intervening period during which time operations will be set up.
All nine winners that competed for licenses in 2014— 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—are based in the Asia-Pacific.
These banks operate in Burma under rigid conditions. They are barred from competing against local lenders in the retail banking sector and are only allowed to run one branch.
Soe Thein, executive director of the local Asian Green Development Bank, said that he is unconcerned about this latest licensing round because of the restrictions on foreign banks.
“As Burma gradually opens, the Central Bank will issue more foreign bank licenses, but I don’t think it will harm the local industry, as foreign banks can’t compete in the local market,” he said.
“I also don’t think that the Central Bank is rushing to issue new licenses before the new government comes to power because it [the Central Bank] stands as an independent body.”
However, Zaw Lin Htut, chief executive officer of the Myanmar Payment Union, said that he expects almost a half-dozen foreign banks to receive licenses by the end of March.
“I’ve heard that four or five more banks may receive licenses before power is handed over to the new government,” he said.
“And because more foreign banks are coming into the country, we will also see more job opportunities for banking professionals.”