The Central Bank of Myanmar (CBM) has kicked off a process to allow foreign banks to start retail operations in the country from 2021.
In the third phase of the banking sector liberalization announced in November 2019, the sector regulator will issue foreign banks with representative offices in Myanmar with either a branch licence or a subsidiary licence.
The CBM has issue issued an expression of interest to award a minimum of five and up to 10 licences to foreign financial institutions.
As per the announcement, the licensees will be permitted to serve both local and foreign financial institutions in addition to local and foreign corporates.
The licensees would need to contribute to the improvement and expansion of the domestic banking sector by participating in the interbank market, lending to domestic banks, increasing financial education of individuals, engaging in foreign currency exchange and similar activities.
The licensees will be permitted to grant loans and take deposits from companies, banks and individuals in foreign currency and in Myanmar kyat.
A branch licensee will be required to have minimum paid-in capital of US$75 million, out of which US$40 million would be locked up with the CBM for a minimum of two years, interest-free. They will be allowed to operate with just one place of business.
A subsidiary licensee will have to maintain a minimum paid-in capital level of US$100 million and will be will be allowed to serve retail customers (individuals) from 1 January 2021. The subsidiary licensees will be allowed to establish up to 10 branches or off-site ATMs.
ATMs attached to a branch will not be considered as an additional place of business, whereas standalone ATMs will be. And for each branch in Yangon and Mandalay, they will be required to establish an additional location of business outside the two cities.