YANGON — Many of the world’s biggest banks are eager to move into Myanmar now
that the once-secretive nation is opening up its economy to the Western world.
But Maung Maung Win, the deputy
governor of Myanmar’s central bank, says it’s likely to be a while before
Myanmar begins letting foreign banks to set up operations there, other than the
small representative offices many now have in Yangon. The chances are “very,
very low” foreign banks will be let in more extensively this year, he said in
an interview in Yangon this week, in part because authorities are concerned
about the impact on local financial institutions.
“Our private banks cannot compete
with the foreign banks in terms of capacity, and capital,” he said. “We don’t
want to get some kind of negative impacts” by letting foreign banks rush in too
quickly.
Myanmar does want to let foreign
banks in eventually, he said, in part so that they can bring technology and
better practices into the country to help it modernize its antiquated financial
system. Authorities are studying the issue now, he said, and might be willing
to let international financial firms expand their presence in the country as
early as next year.
Right now, financial services in
Myanmar are handled by 19 private local banks and three state-owned banks.
Lending facilities are limited – there are no long-term mortgages, for example
– and many of the banks lack modern services such as online banking or
computerized transactions.
Mr. Maung Maung Win said future
possibilities under consideration include allowing international banks to form
joint ventures with local banks or take equity stakes in them. “We think the
best one is joint ventures,” he said.
But local banks must first shore
up their businesses and begin offering a more sophisticated array of services
so that they are better positioned to compete, he said. Having installed the
country’s first ATMs over the past year, banks are planning in the coming
months to begin issuing debit cards that can be used at local restaurants and
stores.
They are also establishing
correspondent relationships with foreign banks and setting up wire-transfer
services to connect more with the outside world. Once those and other services
are in place, “we plan to allow the foreign banks in,” Mr. Maung Maung Win
said.
Myanmar’s government has already
enacted wide-ranging political and economic changes over the past year, after a
new, nominally civilian government took over from a harsh military regime that
had controlled the country for nearly five decades. Hundreds of political
prisoners have been released, restrictions on the Internet and press have been
loosened and the currency has been floated to help modernize the economy.
Mr. Maung Maung Win said work is
continuing on a law to make the central bank more independent. It now reports
to the finance ministry, and has long been criticized for effectively printing
money to finance the government’s spending. Establishing the bank’s
independence is seen by many analysts as crucial to making the economy and
financial sector more stable.
Mr. Maung Maung Win said such a
law is unlikely to be enacted during the current parliamentary session, but
it’s possible it could be passed in a subsequent session before the end of the
year.
Patrick Barta
Business & Investment Opportunities
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com
No comments:
Post a Comment