The Central Bank of Myanmar (CBM) has now, as predicted, authorised overseas banks operating in Myanmar to offer facilities for exports AND imports.
Previously, it was only the Myanmar Banks who were authorised to provide finance for exports and imports. Overseas banks received permits for export only finance operations at the end of last year.
All forecasts indicate that this will boost the entire economy and stimulate more demand for services and products – another positive sign to note if you are planning to open your company in Myanmar.
At the end of 2017 the CBM contacted the 13 overseas banks operating in Myanmar asking them to apply for permits if they wished to expand their operations in Myanmar to cover the financing of trade. In March of this year the first tranche of seven banks received approval now more have been confirmed.
These banks may also provide credit services to companies operating in Myanmar from overseas. This market that has been the domain of only the Myanmar banks. (There are still retail banking restrictions that still apply to overseas banks. The list of banks as published by the CBM is shown below).
Press releases from the CBM indicate that new guidelines to allow more financial services are under review. This was confirmed by Mr. U Kyaw Kyaw Maung, Governor of the Central Bank of Myanmar, who was appointed on 31st July 2018.
These changes are ongoing. In 2013, The Central Bank of Myanmar Law gave CBM more independence, allowing changes, with more flexible rules, rapidly bringing Myanmar into line with other countries. It is known there were unfavourable comparisons in the past, but Myanmar is catching up fast, very fast! These changes are working. The CBM has injected more money into the economy. This was largely required due to the rapid increase in Government spending on a wide range of projects including road, rail infrastructure, communications and power generation. Thanks to excellent Governance, inflation has lowered, from approximately 10 percent (2015-2015), 7 percent (2016-2017), to 5 percent as at year end 2017. Also, foreign currency exchange (FX), since 2012, is based on a floating rate, and no longer fixed. Many more changes including Interbank FX and in 2016 electronic reporting has been introduced.
These are just some of the changes and the momentum continues.
All are very positive signs for overseas investors, (incl. Basel 11 alignment).
Very significant co-operation exists with the IMF, World Bank,
And SEACEN (South East Asian Banks Centre)
And ASEAN Financial Integration ASEAN +3 (China Japan Korea).
Further liberalisation of banking services and more digital services mean the customer base is expanding, and provision of money supply for the ever growing lists of developments, renovation and modernisation, is increasing.
We confidently expect to see more of the leap frog phenomena – Myanmar jumps to the latest technologies – offering businesses and the population the most modern services. One example is a new entrant to the telecoms sector launching with 4G. Another advance is via CBM authorising banks franchises to offer banking services to more and more of the population, providing them access to banks even if they live in remote rural areas.
FocusCore is entirely focussed on helping all overseas companies start in Myanmar. Being based IN Myanmar with local and international staff and offices across the Far East we are able to provide you with details and a guiding hand to obtain permits, visas, offices, staff, tax and corporate incorporation matching or indeed faster than official timescales. Contact us today to review your options and grow your revenues in Myanmar.
|The Bank of Tokyo-Mitsubishi UFJ, Ltd||22/04/2015|
|Overseas-Chinese Banking Corporation Ltd||23/04/2015|
|Sumitomo Mitsui Banking Corporation||23/04/2015|
|United Overseas Bank Limited||04/05/2015|
|Bangkok Bank Public Company Limited||02/06/2015|
|Industrial and Commercial Bank of China||01/07/2015|
|Malayan Banking Berhad (Maybank)||03/08/2015|
|Mizuho Bank Limited||03/08/2015|
|Australia and New Zealand Banking Group Limited||02/10/2015|
|The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)||01/07/2016|
|E.Sun Commercial Bank Limited||03/10/2016|
|State Bank of India||03/10/2016|