YANGON—Among the large crowd of people lined up for a second day in front of the Myanmar military-owned Myawaddy Bank in Yangon to withdraw money on Wednesday, many expressed concern that the demand for cash across the country could cause the bank to collapse.
After anti-coup protesters called for a boycott of military-related businesses, branches of Myawaddy Bank in Yangon experienced unusually large numbers of customers withdrawing money this week, despite only being open for a few hours in the mornings.
An official from Myawaddy Bank told The Irrawaddy that the bank would only allow around 200 customers a day to take out cash, with withdrawals limited to 5 million kyats (US$3,525) per person. Customers wishing to take out cash must start queuing for tokens at the bank at 7:30 a.m.
“We are worried since it is owned by the military. We don’t believe them anymore. That’s why we decided to take out the cash immediately,” Daw Than Than Myint, 56, from Latha Township, told The Irrawaddy.
“We heard a lot of rumors that they would run out of money and were even struggling to pay the salaries of civil servants,” she said.
U Phay Win, a former banker, told The Irrawaddy that military-owned banks were currently experiencing a run, adding that they would need to boost cash holdings quickly to meet depositors’ demands.
He said an uncontrolled bank run could result in bankruptcy, especially if all branches were experiencing the same issues.
“They have already limited the amount of cash a customer can withdraw at one time. But if many branches faced a large number of withdrawals at the same time, it would be hard to control. It is highly likely to face bankruptcy,” U Phay Win said.
To deal with the problem, he said the military could temporarily suspend withdrawals, or borrow cash from other banks or the central bank.
Most Myawaddy Bank branches in major cities remained closed on Wednesday, citing COVID-19 concerns. A Myawaddy Bank customer in Mandalay told The Irrawaddy that many customers are waiting to withdraw money as soon as the bank resumes operations.
Private banks across the country remained closed except for ATM services on Wednesday, as many staff joined the civil disobedience campaign against the military regime.
The private banks have not announced when they will resume operations, and there has been no word on the issue from the Myanmar Banks Association or the Central Bank of Myanmar.
