Fashion
Bank of Tokyo Mitsubishi UFJ (BTMU) is preparing its systems in Myanmar for the launch of Central Bank’s (CBM) real-time gross settlement (RTGS) system.
Launch is set for the end of 2015 and the development forms part of Myanmar’s move to modernisation. CBM also has the backing of the Japan International Cooperation Agency and the World Bank.
CBM is assisting local banks and foreign banks’ branch offices in preparation of the new system, which will allow the immediate settlement of large domestic interbank payments.
In an interview with The Myanmar Times, Go Watanabe, CEO of Asian and Oceania region, BTMU, says it has seconded staff to the project development team; and it is ‘now able to provide basic financial services including foreign exchange and derivatives trading, and is preparing to launch a more comprehensive suite of trade finance solutions’.
Watanabe says he expects CBM to ‘review regulations governing foreign exchange, which will lead to greater efficiency for cross-border transactions and international settlement’.
The Japanese bank was the first of nine foreign banks to open its branch office in the capital Yangon in April this year, becoming the first international lender to begin operations in the country for more than 50 years.
There will be the inevitable competition, but Watanabe expresses a desire for collaboration.
‘Given Myanmar’s banking industry is still in its infancy, it would make sense for the foreign banks to pull our knowledge and expertise together to develop the necessary banking and finance related infrastructure to help move it to the next level,’ he says.
The Myanmar Times says: ‘BTMU is one of three Japanese banks permitted to offer banking services in Myanmar, and opened its Yangon branch with initial capital of $100 million. BTMU provides services including deposits, loans and foreign exchange to foreign companies and domestic banks.
‘Under existing regulations, foreign banks in Myanmar can only deal directly with foreign companies, local-foreign joint ventures, and Myanmar’s domestic banks. They do not yet have access to local retail or corporate clients.’
Watanabe says, in addition to working with global corporates, BTMU plans to use its majority stake in Thailand’s Bank of Ayudhya PCL – known in Thailand as Krungsri – by ‘tapping its Thai SME segment to further attract investors into Myanmar’.
In both Thailand and Japan, he says, many companies are looking to diversify their investments, and could potentially begin investing in Myanmar.
The bank will also use its partnership with Co-operative Bank (CB Bank), based in Myanmar, especially in the area of transaction banking, he says. BTMU signed an agreement with CB Bank back in 2013, to act as a technical adviser.
Watanabe says the two banks have a joint committee of senior management executives, which aims to encourage knowledge and relationship sharing.
