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Taiwanese Banks Dominate Second Round of Foreign Bank Licenses Application

Central Bank of Myanmar (CBM) received applications from banks from India, Mauritius, South Korea, Taiwan and Vietnam for the second round of selection of domestic banking licenses in Myanmar. Eight of the 13 applicants; State Bank of India, State Bank of Mauritius, South Korea’s Kookmin Bank, Shinhan Bank, Taiwan’s Cathay United Bank, E.SUN Commercial Bank, First Commercial Bank and Vietnam’s BIDV were also shortlisted in the first bidding round in 2014. The new five applicants are all from Taiwan: CTBC Bank, Mega International Commercial Bank, Taiwan Business Bank, Taiwan Cooperative Bank and Taiwan Shin Kong Commercial Bank. Of these, three to five banks will eventually get permit to open a branch and also carry out other banking activities on a limited scale.

In the first bidding round, only banks with representative offices were eligible to apply and banks headquartered in the respective country were successful in obtaining the license. They are from Australia, China, Japan, Malaysia, Singapore, Thailand. Licensing Committee said, “The Request for Proposals (RFP) were acknowledged, publicly opened and accepted. The preliminary license approval will be announced by the end of the first quarter of 2016.

The second round of licensing was aimed at welcoming new foreign banks from additional neighboring countries, which are also important trading partners of Myanmar. The first announcement of the new foreign bank licensing for 2016 was announced in December last year with the objective to further promote existing economic cooperation.” One foreign bank representative said, “Although CBM has not been officially announced yet, we heard the CBM is likely to give a license to only one bank from each country.”

Successful banks will have to pay $75 million as initial capital, a steep requirement that has dissuaded some lenders from applying.