Myanmar central bank to grant new foreign bank licences

The aim is to licence banks from “additional neighbouring and important trading partner economies”, quoted the central bank as saying.

“The main objective of the second round of licensing is to further promote existing economic cooperation.”

Foreign banks headquartered in countries that successfully obtained a licence in the first round – namely Australia, China, Japan, Malaysia, Singapore and Thailand – will not be allowed to participate in the second round, the notice said.

Foreign banks with representative offices in Myanmar or which are in the process of obtaining one will be permitted to participate.

The licence will be for onshore wholesale banking through a branch, and a call for expressions of interest will be made in early 2016, the Central Bank said.

In the last, hotly-contested bidding round, nine foreign banks won licences on October 1 last year, and winners were given a year to prepare operations to meet the approval of the Central Bank.

All of the banks – Bangkok Bank, Australia’s ANZ, Japan’s the Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corporation, the Industrial and Commercial Bank of China (ICBC), Malaysia’s Maybank, and Singapore’s Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) have now opened branches.

The licences came with a number of restrictions – banks are only permitted to lend to foreign businesses and local banks. They may team up with local lenders to offer additional services, but are prohibited from involvement in retail operations.

This marked the first time that foreign banks have operated in the country for more than 50 years – Myanmar had not allowed onshore banking by foreign institutions since 1963, when 14 foreign banks were nationalised.