CBM publishes new basic rules for NBFIsJuly 29, 2020
On 9 July 2020, the Central Bank of Myanmar (“CBM”) published Instruction no. 3/2020 (the “Instruction”), introducing new principles for regulating the non-bank financial institution (“NBFI”) sector. The Instruction has also been circulated to all NBFIs.
The new rules seem to align the NBFI sector with the banking sector, including obligations for NBFIs to:
- Specify the loan amount, annual interest rate and exact repayment schedule in the loan agreement;
- Calculate the interest rate under the outstanding loan balance; and
- Clearly state any commission fees and other fees, if applicable.
The Instruction also provides a general principles that NBFI loan agreements and the terms and conditions thereof should be clearly explained to, read and agreed by the borrowers. CBM may take disciplinary action if NBFIs do not comply with the principles of the Instruction.
The Instruction has become effective from 15 July 2020.