Central Bank of Myanmar (CBM) will allow foreign bank subsidiaries to provide retail services

The Central Bank of Myanmar (CBM) will allow foreign banks to open branches in the country to help local businesses gain access to financing, deputy governor U Soe Thein said during a press conference on May 17.

This includes subsidiaries of foreign banks. “We will allow more foreign bank branches to open up to a suitable extent. Foreign bank subsidiaries will also be allowed in accordance with the law,” he said.

The development comes after the CBM in recent months permitted the 13 foreign banks currently operating in Myanmar to open new branches and later removed restrictions prohibiting them from lending to local businesses. 

The restrictions were lifted to enable local businesses to gain better access to loans for expansion and to improve their financial conditions, U Soe Thein said.

Foreign subsidiaries will be awarded more opportunities than branches. “Retail banking will also be permitted for subsidiaries. Foreign subsidiaries will have full permission to function as local banks,” said U Soe Thein. 

Existing branches of foreign banks will also be permitted to operate as subsidiaries.

“The difference is a branch can be shut down easily if needed whereas for subsidiaries, which are set up separately, it can sell, transfer or divide the shares,” U Soe Thein said. 

Foreign banks have also been permitted to invest up to 35 percent of the total amount of capital if the local private banks want to establish joint ventures with them.

(The Myanmar Times: https://www.mmtimes.com/news/foreign-bank-subsidiaries-allowed-provide-retail-services.html )

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