Local banks have been significant growth and are on the right path to improvement despite their struggle with stricter regulations

The Myanmar banking sector has improved since regulations aimed at strengthening the system were imposed over the past two years, U Soe Thein, vice governor of the Central Bank of Myanmar (CBM), told the media late last month.

“The Financial Institutions Law was enacted in 2016 and new rules were released again in 2017. At first, the banking community protested against the regulations. But most of the banks complied with our directives and there has been significant growth and improvement in the banking sector over the past year,” U Soe Thein said.

Among the directives released by the CBM is notification 7/2017 last November under which all local banks must convert overdraft facilities into term loans. By July 2020, the volume of overdrafts as a percentage of a bank’s loan book should be reduced to 20 percent from 50 pc in July this year.

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