The central banks of Thailand and Myanmar will hold talks on granting access to designated banks in each other’s markets, according to an agreement on November 27.
The move will be a small step forward in the financial integration of ASEAN (the Association of Southeast Asian Nations), a part of the larger integration of ASEAN dubbed as ASEAN Community. Under the ASEAN Banking Integration Framework, member nations are allowed to make bilateral deals that enable banks which meet required criteria to become “Qualified ASEAN Banks” that can operate in each other’s markets on the same terms as local banks.
Thailand has previously made similar bilateral discussions with Malaysia and Indonesia. For Myanmar, it is the first time to have talks with an ASEAN member on reciprocal banking deal. Currently, foreign bankers have been continuously rushing into Myanmar which has just opened up. The country recently welcomed the arrival of banking corporations from Japan, Korea and Vietnam.
Kanbawza Bank, the largest lender in Myanmar, opened a representative office in Bangkok in August, becoming the first Myanmar bank to operate overseas. While trade and investment have been increasing in the region in the wake of deregulation and elimination of tariffs, much work remains with regards to financial connectivity in the region, the governor of Bank of Thailand Veerathai Santiprabhob said.
