Out-Law News | 09 Oct 2014 | 10:48 am | 2 min. read
The Industrial and Commercial Bank of China, the Oversea-Chinese Banking Corporation (OCBC) and Singapore’s United Overseas Bank (UOB) were awarded the licences along with banks from Thailand and Japan.
The CBM's foreign banks licensing committee said on 1 October (1-page / 64 KB PDF) that its “preliminary approval” for licences for each of the banks is valid for 12 months, during which the nine “will have to fulfil the commitments made” in their licence applications that were submitted last July. The banks had been selected based on “detailed quantitative and qualitative criteria”, the CBM said.
The banks will also have to “take all necessary measures to ensure functional banking operation from day one of business and comply with requirements laid down by the Central Bank of Myanmar”. Banks fulfilling all the conditions will be granted a “final licence” to operate in Myanmar, the CBM said.
The CBM said it looked forward to the “continuous involvement in the financial sector and economic development” of Myanmar by all of the banks.
OCBC said it would offer (3-page / 288 KB PDF) “a full range of banking products and services to foreign companies and joint ventures, as well as domestic banks in Myanmar”. OCBC said the banks had up to one year to prepare for the launch of business operations in Myanmar.
OCBC said it has had a presence in Myanmar for 60 years, having first operated a branch there for 40 years up to 1963, and subsequently a representative office in Yangon. The head of OCBC’s global commercial banking Linus Goh said: “We will also work together with our domestic banking partners to strengthen the foundation of the financial sector, by introducing new capabilities and innovative services to support its growth and transformation.”
Goh said: “Since the opening up of the Myanmar economy in 2011, we have witnessed a steady increase in foreign interest across several key sectors of the economy including real estate and infrastructure development, commodities, power and energy, and telecommunications.”
UOB’s deputy chairman and group chief executive officer Wee Ee Cheong said (1-page / 160 KB PDF) the licence would enable the bank to “participate more actively in Myanmar’s rapid economic development”. He said: “We hope to work even more closely with the Central Bank and Myanmar local banks to provide financial solutions for the banking community and multinational companies with interests in the country.”
According to the CBM, there were 50 representative offices of banks in Myanmar between 1993 and 2000. “In 1992, after the Asia financial crisis, the 38 foreign banks closed their representative offices.” The CBM said that, as of November 2010, there were 13 representative offices of foreign banks in Myanmar of which four were from Singapore, two each from Malaysia and Japan and one each from Bangladesh, Thailand, Cambodia, Brunei and Vietnam.
State media in Myanmar reported last year that the country had agreed to accede to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Once in force, arbitral awards made in the country would be enforceable in all 148 countries that are signatories to the Convention, while awards made in signatory countries would be enforceable in Myanmar.
The International Monetary Fund (IMF) said earlier this year that Myanmar “is well placed to build on its recent economic reforms and embark on an extended period of rapid growth, emulating its regional peers”. However, the IMF said: “Fiscal and external buffers remain thin and demand-side pressures on inflation and large capital inflows will strain the still-infant macroeconomic management tools. The expected entry of foreign banks to the already rapidly growing financial sector will place further demands on macroeconomic policy and stretch scarce supervision capacity.”