YANGON—The Central Bank of Myanmar (CBM) has lowered its limits on cash withdrawals from ATMs and bank accounts after a military-owned bank suspended operations last week as it faced a run on deposits.
Claiming the move is aimed at encouraging digital payments, the CBM’s directive states that starting Monday, individuals can withdraw a maximum of 500,000 kyats (about US$354) from ATMs per day. Until Feb. 28, ATM users were allowed to withdraw up to 1 million kyats per day.
Individuals can withdraw a maximum 2 million kyats per week from their bank accounts. For companies and organizations, the limit is 20 million kyats per week, the CBM said.
Private banks’ services have been limited to ATMs and online banking since early February, as their employees have stopped working to join the Civil Disobedience Movement (CDM) against the military regime. Despite pressure on banks from the military regime to reopen, employees have staunchly refused to return to their offices.
Since the coup, unstable political conditions have caused rumors to swirl, including that some banks are on the verge of collapse. Since Feb. 8, people have lined up in front of ATMs every day to withdraw as much cash as they can. Private banks fill up all the ATMs in Yangon, Myanmar’s commercial capital, early every morning, but the cash usually runs out at around 10 or 11 a.m. Last week, private banks limited withdrawals to 1 million kyats per day.
“Banks might be concerned that they will face bank runs as soon as they reopen,” a founder of an IT company based in Naypyitaw told The Irrawaddy.
“The withdrawal amount for a company per week is quite problematic. For the big companies, it could create a crisis,” he said.
Currently, private banks are refusing to provide payroll services, and many companies across the country are now delaying payment of salaries to employees. Some companies are planning to pay staff in cash.
On Monday, the central bank asked private banks to reopen branches in border towns including Muse and Myawaddy, as they play a major role in border trade. It said traders have faced difficulties due to the suspension of bank services. Officials from private banks said their ability to reopen would depend whether staff involved in the CDM returned.
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