
Client Alert: Foreign Bank Branches Permitted to Extend Banking Services to Local Companies in Myanmar
November 9, 2018In an exciting development, the Central Bank of Myanmar (the “CBM”) on 8 November 2018 issued Directive No. 6/2018 (the “Directive”) which grants permission to foreign bank branches to extend banking services to local companies wholly owned by Myanmar nationals.
As the reader may already be aware, there are 13 foreign bank branches operating in Myanmar. Prior to the Directive being issued, foreign bank branches were permitted to extend financing and other banking services only to foreign companies and not local companies. Previously, branches are already allowed to finance either in United States dollars or Myanmar Kyat.
The CBM, however, carved out exceptions to the above by permitting foreign bank branches to extend wholesale banking and export financing services.
Now, in an unprecedented and groundbreaking move, the CBM has thrown the floodgates wide open by issuing the Directive, permitting foreign bank branches to extend any form of financing and other banking services permitted by law to local companies, at par with local banks.
The stated aim of the CBM for issuing the Directive is to provide local companies greater access to financing and other banking services, and indeed, both foreign bank branches and local companies are expressing equal interest in doing business with each other. This will also mean a change in the competitive landscape for local banks.
The Directive has far-reaching implications for the banking industry and stakeholders can expect a flurry of activity in the near future.
KEYWORDS
RELATED EXPERIENCES
Related Articles
- The Central Bank of Myanmar Issues New Directive on Non-Banking Financial Institutions
- February 24, 2021 - Looking Back – Developments in the Microfinance Regulations of Myanmar in 2020
- January 27, 2021 - What Is Different About Cambodia’s New Solar Project Tender?
- January 4, 2021 - Year in Review: Developments in Banking Regulations of Central Bank of Myanmar – 2020
- December 29, 2020 - A journey of a thousand miles begins with a single step… A practical step plan for expatriate’s return and travel to Myanmar in the current conditions
- December 4, 2020