Myanmar postpones announcing foreign winners of banking licenses

Four Thai banks with presence in the country - Bangkok Bank, Kasikornbank, Siam Commercial Bank and Krungthai Bank - vie for the licenses.

Previously, Set Aung said the announcement would be made by the end of this month, dismissing speculation that the process was not going smoothly. Set Aung also declined to say the number of licences that would be given, though officials have said it would be between five and 10.

Set Aung also said corporate banking would be officially launched next month and controls on interest rates loosened as the central bank took more steps to liberalise the domestic banking sector.

"The initial step towards corporate banking will be to allow foreign banks to give loans to foreign companies and local banks. Local businesses can borrow from foreign banks through local banks. The interest rate will be 10-13 per cent for loans in kyat," Set Aung explained.

US dollar loans will not be fixed as foreign banks can use their own credit-rating systems, he said.

Set Aung said small and medium-sized enterprises (SMEs) receive loans at 8.5 per cent from some government-run banks, adding that most countries offered lower interest rates to SMEs through state- lending agencies. Private banks do not have to follow these "policy loans", however, he added.

"Their interest rates differ based on many factors, including the market rate," he explained.

The central bank will relax rates on interest rates in the future to spur economic growth, the deputy governor said. He noted that private banks in Thailand lent at rates as low as 3.5 per cent, but said for SMEs their rates were as high as 13.5 per cent.

He said the bank was striving to create greater flexibility in the market, but critics say the banking sector is still constrained by short-term limits set on loans.

On July 15, the central bank announced that 25 foreign banks are qualified for the final round, selected from the total 30 banks that vied for the licenses and have been pre-qualified.

Currently, Myanmar has representative offices of 42 foreign banks. Several leading international bank with Myanmar representative offices are absent from the list of 25 including Standard Chartered and South Korea's Hana Bank and Woori Bank.

The banks appeared in the list include ANZ from Australia, Industrial and Commercial Bank of China (ICBC); BRED of France; State Bank of India; Japan's Mizuho Bank, Bank of Tokyo, Mitsubishi UFJ, Sumitomo Mitsu Banking Corporation; Malaysia Maybank, OCBC, RHB Bank and CIMB; State Bank of Mauritius, Singapore's OCBC, DBS and United Overseas Bank; South Korea's Kookmin Bank, Shinhan Bank and Industrial Bank of Korea; Taiwan's Cathay United Bank, E SUN Commercial Bank and First Commercial Bank; Thailand's Bangkok Bank, Krungthai Bank, Siam Commercial Bank, Kasikornbank and BIDV from Vietnam.

http://www.information.myanmaronlinecentre.com/myanmar-postpones-announcing-foreign-winners-of-banking-licenses/