Financial Services
From The Report: Myanmar 2014
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After being nationalised in 1963, Myanmar’s financial system was liberalised in 1988, allowing for the emergence of several private banks. The government’s strategy for developing the sector includes a three-phase plan that emphasises an independent central bank and adequate regulation. Foreign banks are lining up at the country’s doorstep to tap into this potentially major market in the heart of South-east Asia, but significant challenges lie ahead, and risks to the banks, depositors and borrowers are evident. Competition for Myanmar’s banking sector is fierce, and a wide arsenal of tools must be carefully selected over the coming years if institutions hope to succeed. The country is also on its way to opening a local, modern Yangon Stock Exchange (YSE) by 2015 after Myanmar’s first stock exchange was closed in 1960. Rounding off Myanmar’s financial services sector, the insurance industry is also moving forward as, for the first time in 60 years, Myanmar has permitted private insurance companies to compete with the state monopoly.
This chapter contains interviews with U Win Shein, Minister of Finance, and Chairman, Myanmar Investment Commission; U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar; and a banking roundtable with U Than Lwin, Deputy Chairman, KBZ Bank; U Kyaw Lynn, CEO, Cooperative Bank; and U Win Min Khine, Managing director, Apex Bank.

Articles from this Chapter

Overview

Golden opportunity: With both high risks and significant opportunities, the government is focusing on stable development
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Recent reforms in the sector are beginning to take off and to address the low levels of lending and banking recorded in the country in 2011. Foreign banks are lining up at the country’s doorstep to tap into this potentially major market in the heart of South-east Asia. Since April 2011 and the shift in government policy, banks have started to engage with international technology providers, offer more modern services, regain trust and improve lending procedures. The government has highlighted the…

Analysis

First things first: The central bank prepares to push through an overhaul of the sector
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On July 11, 2013 Myanmar’s President U Thein Sein signed the long-awaited Central Bank of Myanmar (CBM) Law, which will separate the central bank from the Ministry of Finance and Revenue, securing its autonomy and clearly delineating its responsibilities. The move is a key building block in the country’s series of recent reforms and aims to radically transform the way the financial sector is regulated in Myanmar, as well as re-assure potential inbound investors The financial system in Myanmar…

Interview

OBG talks to U Win Shein, Minister of Finance, and Chairman, Myanmar Investment Commission
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Interview:U Win Shein What type of new risks is Myanmar’s economy facing during its current transition period? How have these risks been managed? U WIN SHEIN: Being a country in transition, there are both opportunities and challenges in many areas of the economy. Since Myanmar started opening up a couple of years ago, it has been taking various levels of necessary and calculated risk to achieve significant reforms in various sectors. There are a few groups, mainly international organisations,…

Interview

OBG talks to U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar (CBM)
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Interview:U Kyaw Kyaw Maung What relationship will the CBM have with the Ministry of Finance (MoF) now it is autonomous? U KYAW KYAW MAUNG: While the CBM has separated from the MoF, the two institutions will continue as natural counterparts to ensure the consistency of monetary and fiscal policies. The CBM will still function as fiscal agent, whose main task is to maintain a single account for the MoF, through which the state budget is channelled. This is essential to financial oversight,…

Analysis

Balancing act: International players weigh the benefits of diving into the sector
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In the past two years Myanmar’s local banks have begun to feel the pull of internationalisation as foreign firms appear in the country to offer their services. Potential joint venture partners, technology retailers, payment system providers and a wide selection of other products are now at their fingertips. Yet while advancements are definitely needed, some warn that prudent spending, strategic planning, education and professional branding are more pressing concerns. Banking Battleground ATMs…

Interview

International integration: OBG talks to U Than Lwin, Deputy Chairman, KBZ Bank; U Kyaw Lynn, CEO, Cooperative Bank; and U Win Min Khine, Managing Director, Apex Bank
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Interview:U Than Lwin,U Kyaw Lynn,U Win Min Khine What contributions can we expect from foreign banks in developing the local banking sector over the next 12-18 months? U THAN LWIN: Myanmar has been away from the international banking community since 1963 when it nationalised 14 foreign banks. The banking sector then was very vibrant. After the nationalisation, the banking sector lost its appeal and as a result of sanctions only conducted basic banking activities for almost 50…

Overview

On the right track: Plans to open a modern stock exchange in Yangon are under way
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Myanmar is well on its way to opening a local, modern Yangon Stock Exchange (YSE) by 2015 with the help of the Tokyo Stock Exchange and Daiwa Securities, Japan’s second-largest brokerage house. Demand from over 60 companies is high and investors are anxious to obtain liquid access to the market. Even so, many building blocks must be put in place before the exchange can become a reality. Myanmar’s first stock exchange was closed in 1960 after the military assumed control of the country. It was…

Overview

Safety first: The entry of private companies should shake up the insurance sector
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For the first time in 60 years, Myanmar has permitted private insurance companies to compete with the state monopoly, granting 12 licences in June 2013 to local companies as part of a wider set of reforms aimed at making the financial system more market-driven. But Myanma Insurance, the country’s insurance monopoly, will continue to remain the sector’s largest player and regulator, keeping a close eye on these newcomers in the upcoming “test period” lasting three to five years, after which…