Myanmar awards service license to more foreign banks

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) will be among nine other foreign banks which have won licenses to open a branch in Myanmar.

Author

July 6, 2016

Granted by the Foreign Bank Licensing Committee, the Bank for Investment and Development of Vietnam (BIDV) will be the first ever Vietnamese bank operating in Myanmar.

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]he Central Bank of Myanmar (CBM) on Monday awarded a final service license to the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) for it to formally operate in the country after being found to meet the requirement laid down by the CBM under a one-year-valid preliminary license.

Granted by the Foreign Bank Licensing Committee, the BIDV was to commence operations from July 1, becoming the first ever Vietnamese bank operating in Myanmar.

The BIDV is one of the four latest foreign banks which have gained preliminary approval of operating licenses since March to serve for foreign companies investing in Myanmar. The other three, which are E SUN Commercial Bank from China’s Taiwan, Shinhan Bank from South Korea and State Bank of India, are yet to meet the set requirements for final approval for service licenses.

South Korea’s Shinhan Bank, which plans to operate its branch in Yangon in the first quarter of 2017, said Myanmar will play a crucial role in tapping deeper into the market of the Association of Southeast Asian Nations (ASEAN).

Earlier, nine foreign banks had won such licenses in October in 2014 and have all opened branches in Myanmar. They are three from Japan, two from Singapore, one each from China, Malaysia, Thailand and Australia-New Zealand.

The latest granting of the four new foreign banks to operate in Myanmar adds to nine prior ones totaling 13 so far.

2014’s approval of such licenses to foreign banks marked the first in the country in more than five decades.

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]he granted international bank branches are allowed to operate wholesale banking and to lend money to foreign investment companies and local banks.

The foreign bank branches are also allowed to lend money to local companies through local banks or to lend a syndicated loan to local companies in cooperation with local banks.

There are also 25 local private banks and four state- owned banks in the country at present.

Meanwhile, Myanmar has announced in March allowing diplomatic corps to open foreign currency account in local private banks as part of its measures to boost the banking sector. Previously, diplomatic corps are restricted to do so with the state-owned banks for foreign currency transaction.

At present, there has been 17 local private banks granted for foreign exchange services among 25 banks including semi-government banks.

Notes: Xinhua- (This story has not been edited by PGurus.com and is generated from a syndicated feed we subscribe to)