14 Nov 2019
MYANMAR: Call Issued for Overseas Banks to Participate in New Licensing Round
Overseas banks with existing representative offices in the country are to be invited to bid for new wholesale and retail operating licences. This is the third time the Central Bank of Myanmar (CBM) has called for bids from overseas banks with regard to operating licences.
This time round, two forms of licenses are on offer – a Branch Licence and a Subsidiary Licence. Any overseas bank that successfully secures a Branch Licence will only be entitled to open one branch in Myanmar and to offer the same range of services as other foreign banks operating in the country. This will see them entitled to extend credit facilities to overseas-owned and domestically-owned businesses but barred from offering retail banking services. Successful applicants will also be required to invest minimum paid-in capital of US$75 million, with $40 million of this deposited with the CMB for a minimum of two years.
In the case of those securing a Subsidiary Licence, however, they will be permitted to set up a wholly-owned subsidiary in the country and offer all the wholesale banking services currently provided by other overseas bank branches. In addition, as of 1 January 2021, subsidiaries will be allowed to offer the retail banking services currently only available from local banks. Subsidiary license-holders will also be permitted to operate from up to 10 separate locations whether as individual branches or off-site ATMs. Before commencing operations, however, subsidiary licence holders will be required to invest $100 million in paid-in capital.
The CBM has also indicated that, as of June 2020, existing foreign bank branches will be permitted to convert into subsidiaries should they so wish. To be eligible, however, applicants must have been operating a bank branch in Myanmar for at least three years. It has also been announced that, as of 1 January 2020, overseas banks will permitted to acquire a stake in a local bank in excess of the current maximum of 35%.