Arab Today, arab today myanmar looking to \strengthen\ banking system in overhaul
Last Updated : GMT 19:28:26
Arab Today, arab today
Arab Today, arab today

Myanmar looking to \'strengthen\' banking system in overhaul

Arab Today, arab today

Arab Today, arab today Myanmar looking to \'strengthen\' banking system in overhaul

Yangon - AFP

As it strives to become Asia's next economic star Myanmar has set its sights on overhauling its battered and distrusted banking system, a move which could pave the way for foreign lenders to open branches. Legislation handing independence to the Central Bank of Myanmar is set to be scrutinised by lawmakers over the coming weeks, in the latest reform of an economy which was for decades shambolically mismanaged by the former junta. The measure will be "a first step in a broader financial sector reform" geared at "strengthening and liberalising" Myanmar's enfeebled banking sector, according to Rajiv Biswas, economist at research group IHS Global Insight. It is also likely to prove complex, in a country where savings are often hoarded in gold and banks are viewed with deep suspicion after a number of scandals and currency collapses. Myanmar currently has 19 private banks, as well as four state lenders, but these are "relatively weak in term of capitalisation", according to Romain Caillaud, Myanmar director of business advisory firm Vriens & Partners. Strict regulations from the central bank -- including a ban on loan terms of more than one year and the imposition of fixed interest rates -- have also strangled competition among private lenders, he added. State banks are not subject to the same rules, but they effectively repel borrowers with prohibitively high risk valuations for loans. Nationalised by the military regime which came to power in 1962, banking disintegrated with the economy during the bungled implementation of socialist-style policies which were laced with superstition -- the kyat currency was at one point issued in denominations of nine, an auspicious number. That demise was deepened by US financial sanctions, which have been partly lifted in response to sweeping changes since the end of junta rule in 2011. But Myanmar's banking system is yet to recover. It suffered a hammer blow in 2003 when three banks collapsed in a crisis exacerbated by Central Bank policies, such as recalling loans from borrowers. The kyat quickly became scarce, paralysing the economy and deeply shaking public confidence. "I don't save in the banks," said Hla Hla, a nurse, as she browses for a necklace at a gold shop in Yangon. "At least I can wear this jewellery while I am saving," she jokes. Only between one and two million of the nation's 60 million people use bank services, according to Ye Min Oo, managing director of Asia Green Development Bank, one of the country's private lenders. Another major problem is the lack of bank branches. Ye Min Oo said in total there are around 400 branches across Myanmar -- a country equivalent in size and population to France which has around 39,000 outlets. "Most ordinary people think banks are nothing to do with them," he said, urging the roll out of more branches "to encourage economic development". Without a functioning banking system, experts say it will be impossible to channel the investment needed to resuscitate the country's moribund economy. "They (private banks) cannot support businesses to perform at an international standard," said Hnin Oo, vice chairman of the Myanmar Fisheries Federation. A new quasi-civilian government has won plaudits -- and the removal or suspension of many key financial and economic sanctions -- with a raft of reforms since coming to power in 2011. Dramatic changes have included the election of democracy champion Aung San Suu Kyi to parliament, with shifts also made to try and kick start the economy, including unifying the country's multiple exchange rates and passing a law to help smoother foreign investment. But Hnin Oo said that only "minor" progress had been made in banking, with some credit cards and a smattering of ATM machines now in use. Hope for change lies in the opening of the sector to foreign banks with financial muscle and industry expertise. Minister for Finance Win Shein suggested in October that overseas firms could be allowed into the country in stages, in a speech published on the website of the International Monetary Fund (IMF). An initial phase would be the creation of joint ventures between foreign and domestic banks, with the eventual aim of fully opening the country to subsidiaries of outside lenders. Foreign banks can currently only open representative offices without actually providing services. IHS's Biswas said parliament is likely to give the green light for joint ventures this year and enable foreign banks to open branches in 2015. He added that the country's failure to open up the sector so far has prevented "foreign capital, technology and innovation from strengthening Myanmar's banking industry".

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today myanmar looking to \strengthen\ banking system in overhaul Arab Today, arab today myanmar looking to \strengthen\ banking system in overhaul

 



Arab Today, arab today
Arab Today, arab today Saudis await visitors but will they come?

GMT 11:54 2017 Thursday ,23 February

Saudis await visitors but will they come?
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Blind sheikh buried in Egypt

GMT 06:32 2017 Thursday ,23 February

Blind sheikh buried in Egypt
Arab Today, arab today Media host Mona Iraqi stresses her show's success

GMT 15:32 2017 Wednesday ,22 February

Media host Mona Iraqi stresses her show's success
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today To hold social dialogue over secondary school

GMT 07:43 2017 Wednesday ,22 February

To hold social dialogue over secondary school
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Salma Rashid happy for 'A Whisper of Love'

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 06:41 2017 Monday ,20 February

Janat pleased for issuing 'Good Morning'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday