Central Bank of Myanmar (CBM) announced that it will open a second round of foreign bank licenses early next year. CBM aims to welcome important trading partner economies, attract further foreign investments and promote existing economic cooperation further. Foreign banks with representative offices in Myanmar or those in the process of opening one will be permitted to participate. The license will be for onshore wholesale banking through a branch and a call for expressions of interest will be made early 2016. CBM did not specify how many licenses would be granted this time round.
On 1st October last year, after hotly contested bidding round, nine foreign banks were granted the licenses. They included: Australia and New Zealand Banking Group (ANZ), Bangkok Bank, Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corporation, Industrial and Commercial Bank of China (ICBC), Malayan Banking Berhad (Maybank), and Over sea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB). All have now opened up branches in Myanmar. These banks will not be eligible to participate for second round licenses. This marked the first time that foreign banks have operated in the country for after more than 50 years of absence. Myanmar had not allowed onshore banking by foreign institutions since 1963, when fourteen foreign banks operating at that time were nationalized
Many restrictions remain on what services foreign banks can offer to the nation of 51 million. Foreign banks are only permitted to lend to foreign businesses and local banks. They may corporate with local lenders to offer additional services, but are prohibited from involvement in retail operations. Banking services in the country are still limited and the domestic industry is dominated by financial institutions with ties to the military.
According to data from the Directorate of Investment and Company Administration, foreign direct investment in Myanmar reached $3.58 billion in the first seven months of current fiscal year.
