Banking
From The Report: Myanmar 2020
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The pace of reform in Myanmar’s banking sector has been increasing in recent years, with liberalisation taking a major step forwards in November 2019 when the Central Bank of Myanmar announced that foreign banks would be able to secure a licence to engage in onshore retail business through a subsidiary or joint venture from 2021. Naturally, challenges remain for an industry that only recently emerged from decades of exclusion from the global financial system. Many citizens remain outside the formal network of banks and microfinance institutions, relying instead on informal sources for their financial needs. Skilled human resources also remain a barrier, as new banking methods increasingly challenge traditional practices, while local professionals trained to global banking standards remain scarce. Furthermore, as reform continues, the regulatory regime remains restrictive in terms of products, interest rates, loan books and deposits. This chapter contains a viewpoint from U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar; as well as interviews with Linus Goh, Head of Global Commercial Banking and Executive Vice-President, Oversea-Chinese Banking Corporation; and Christopher Loh, CEO, uab Bank.

Articles from this Chapter

Overview

Widening reach: Sector formalisation and financial inclusion efforts take hold as the market opens up to foreign participation
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The pace of reform in Myanmar’s banking sector has been increasing in recent years, with liberalisation taking a major step forwards in November 2019 when the Central Bank of Myanmar (CBM) announced that foreign banks would be able to get a licence to engage in onshore retail through a subsidiary or joint venture from 2021. These steps follow the trajectory of reform launched in 2016 by the National League for Democracy-led government, with this administration set to continue financial…

Viewpoint

Full speed ahead: U Kyaw Kyaw Maung, Governor, Central Bank of Myanmar (CBM), on facilitating the financial sector amid global headwinds
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Viewpoint:U Kyaw Kyaw Maung The successful implementation of the second wave of reforms associated with the Myanmar Sustainable Development Plan will focus on peace, stability and good governance, and will help us achieve the UN’s Sustainable Development Goals. Although the economy slowed to about 6.2% between April to September 2018, due to weakening external and domestic demand, we expect growth to rebound to 6.8% in FY 2018/19 and then to 7% in FY 2019/20, supported by an increase in…

Analysis

Foreign participation: Liberalisation continues in a bid to boost credit growth
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As part of ongoing efforts to liberalise the financial services sector and increase credit to the private sector, the Central Bank of Myanmar (CBM) has introduced regulations to facilitate foreign investment in domestic lenders. In January 2019 the CBM issued Regulation No. 1 of 2019, allowing foreign banks and financial institutions to hold equity of up to 35% in local banks, starting in January 2020. To obtain approval from the CBM, a domestic lender will have to provide a copy of the agreement…

Analysis

Greater inclusion: Increased access to microfinance has far-reaching effects
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In a country where 70% of the population work in rural communities, and around a quarter of all citizens live below the poverty line, microfinance is one of the few available sources for personal and business funding. Myanmar’s microfinance institutions (MFIs) are thus a vital part of efforts to boost access to credit. Indicators of financial inclusion have historically been low in the country. According to the Making Access Possible (MAP) initiative of the UN Capital Development Fund (UNCDF),…

Interview

Striking a balance: Linus Goh, Head of Global Commercial Banking and Executive Vice-President, Oversea-Chinese Banking Corporation, on the sector’s growth requirements within a frontier market
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Interview:Linus Goh How do you assess the strength of Myanmar’s banking regulatory framework? LINUS GOH: In the past couple of years the Central Bank of Myanmar (CBM) has strengthened the governance standards for the domestic banking sector. These changes are appropriate and in line with global standards. That said, the market remains a frontier one, and is at an early stage in its development. The pace of enforcement is as important as a developed regulatory framework. It is difficult…

Interview

Convenience and service: Christopher Loh, CEO, uab bank, on the impact of regulatory reforms and efforts to optimise interbank transfers
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Interview:Christopher Loh Where do you see the greatest potential for growth in Myanmar’s banking sector? CHRISTOPHER LOH: Myanmar is a cash-based society, and the road towards modern methods of banking will require a change of mindset. One way to catalyse this is to undermine pre-existing perceptions. Take, for instance, with our mobile banking platform – we have eliminated the fees for personal transfer across all our branches. This practice had been standard in the industry for a long…

Analysis

Tech revolution: Mobile banking is prioritised under financial inclusion strategy
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Mobile banking has been a key factor in the recent improvement of Myanmar’s financial inclusion rates. Following the liberalisation of the telecoms industry in 2014, the country has seen a surge in mobile phone ownership, partly as a result of cheaper data and better network competition, making it an effective channel for financial services and products. The country’s electronic payments gateways and regulations have been playing catch up with this development, at times struggling to…

Analysis

Standard procedure: Countries across Asia Pacific roll out financial reporting regulations based on an international framework
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The banks of Asia Pacific have been subject to successive waves of regulatory changes in recent years. Remaining compliant with strengthened anti-money laundering rules, know-your-customer guidelines and a raft of sustainability and transparency initiatives proved to be a resource-consuming process for the region’s lending institutions. However, one regulatory shift in particular has monopolised the attention of banks’ management and audit committees. The International Financial Reporting…

Analysis

Standard procedure: Countries across Asia Pacific roll out financial reporting regulations based on an international framework
OBG
plus

The banks of Asia Pacific have been subject to successive waves of regulatory changes in recent years. Remaining compliant with strengthened anti-money laundering rules, know-your-customer guidelines and a raft of sustainability and transparency initiatives proved to be a resource-consuming process for the region’s lending institutions. However, one regulatory shift in particular has monopolised the attention of banks’ management and audit committees. The International Financial Reporting…

Overview

A swing in the balance: Following a retrenchment of overseas operations by numerous major banks, how are firms in emerging markets responding?
OBG
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In the three decades before the 2007-08 global financial crisis, the world’s financial networks became increasingly interconnected. Financial system regulatory convergence and the growing penetration of World Trade Organisation rules, as well as the creation of currency unions such as the euro, resulted in a surge in cross-border capital flows. Global banks began to see the emergence of a single global marketplace, and the potential this held for revenue and asset growth. International players such as Citigroup, the Royal Bank of Scotland (RBS), Deutsche Bank, BNP Paribas, Barclays, HSBC, Crédit Agricole, UBS, Bank of America, Société…

Overview

A swing in the balance: Following a retrenchment of overseas operations by numerous major banks, how are firms in emerging markets responding?
OBG
plus

In the three decades before the 2007-08 global financial crisis, the world’s financial networks became increasingly interconnected. Financial system regulatory convergence and the growing penetration of World Trade Organisation rules, as well as the creation of currency unions such as the euro, resulted in a surge in cross-border capital flows. Global banks began to see the emergence of a single global marketplace, and the potential this held for revenue and asset growth. International players such as Citigroup, the Royal Bank of Scotland (RBS), Deutsche Bank, BNP Paribas, Barclays, HSBC, Crédit Agricole, UBS, Bank of America, Société…