banking

Three foreign banks out of nine, which won licenses to open branches in Myanmar, formally started their banking businesses in Yangon respectively over the last two days.
bankingThe opening of branches of the first three foreign banks — Bank of Tokyo Mitshubishi UFJ Ltd (BTMU) and Sumitomo Mitsui Banking Corporation (SMBC) of Japan and Overseas Chinese Banking Corporation (OCBC) of Singapore — signified one of the achievements in Myanmar’s banking reform.
The remaining six foreign banks, which were also awarded such licenses, are expected to follow suit sooner or later.
The six banks are another one from Japan, another one from Singapore, one each from China, Malaysia, Thailand and Australia- New Zealand.
A total of nine foreign banks were granted by the Myanmar government in October last year for service operation licenses in the country for the first time in more than five decades.
These banks are allowed to provide full banking services including deposit, loan, and foreign exchange to foreign companies and domestic banks operating in Myanmar.
These banks are also allowed to operate wholesale banking and to lend money to foreign investment companies and local banks.
The foreign banks are also allowed to lend money to local companies through local banks or to lend a syndicated loan to local companies in cooperation with local banks.
The nine approved banks were short listed from 25 which bid for the licenses in the first phase of selection in July last year.
There were 43 foreign bank representative offices stationed in Myanmar up to 2014, of which 25 made the bid for banking licenses.
For the past decades, Myanmar permitted allowed foreign banks to open representative offices only in the country for observation without permission to operate banking services.
There are also 25 local private and four state-owned banks in the country.
Meanwhile, 57 private security companies have so far bid for service provider licenses for establishing Myanmar’s first ever stock exchange in Yangon since the Securities and Exchange Commission started inviting applications for the establishment on Jan. 19.
The commission announced granting four kinds of services licenses — underwriters, dealers, brokers and consultants, prescribing different levels of capital requirement for each.
Specifically, a license for underwriting requires 15 billion Kyats ( 15 million U.S. dollars), for dealing 10 billion Kyats, for brokerage 7 billion Kyats and for consultancy business 30 million Kyats as paid-up capital.
The winners for the service licenses are expected to be announced soon and the launching of the country’s first ever stock exchange market in Yangon is scheduled for Oct. 1 this year in joint venture with two Japanese firms.
Under an agreement signed in Nay Pyi Taw, the Yangon Stock Exchange Joint Venture Co. Ltd will be set up in partnership among Myanmar Economic Bank (MEB) sharing 51 percent, Japan’s Daiwa Institute of Research Ltd 30.25 percent and Japan Exchange Group 18.75 percent. Enditem

Source: Xinhua

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