KUALA LUMPUR: Malayan Banking Bhd (Maybank), the country’s biggest lender, has emerged as one of the nine regional banks and the only one from Malaysia to be awarded a foreign bank licence in Myanmar.
According to Central Bank of Myanmar, the licence will allow Maybank to open a branch office and provide banking services in the country.
This marks a new horizon in Myanmar’s banking industry as it had previously restricted foreign banks’ operations.
It is also seen as the government’s biggest move to bring in much-needed foreign capital into a fast-growing economy, according to Reuters.
Myanmar’s economy is expected to grow 7.75 per cent in the 2014/2015 financial year, International Monetary Fund data shows.
Maybank group president and chief executive officer Datuk Abdul Farid Alias said the new development is a significant milestone in the bank’s partnership with Myanmar.
It will further strengthen the group’s regional footprint as well as its capabilities in serving customers seamlessly throughout Asean, he added.
“We hope to facilitate greater cross-border trade between Myanmar and our core markets as well as the Greater Mekong sub-region, particularly in Yunnan, upon the opening of our third China branch in Kunming,” he said in a statement yesterday.
Maybank opened its representative office in Yangon in 1994, providing liaison and advisory services.
For more than 20 years, Maybank has established correspondent banking relationships with domestic banks and supported Myanmar in infrastructure-building by leveraging on its regional presence and project financing strength.
Maybank has financed key infrastructure works such as airport, telecommunications and gas pipeline projects.
The implementation of Maybank Money Express in 2012 has also made Maybank the first Malaysian bank to establish a Myanmar-Malaysia remittance service jointly with five domestic banks.
Meanwhile, Reuters reported that other foreign banks granted the preliminary licences were Singapore’s Oversea-Chinese Banking Corp and United Overseas Bank, Thailand’s Bangkok Bank, Australia’s ANZ, China’s Industrial and Commercial Bank of China Ltd and Japan’s Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group.
The banks have 12 months to comply with the central bank’s requirements, including a minimum paid-in capital of US$75 million (RM246 million).
Crippled by decades of mismanagement under military regimes and cut off from much of the world due to Western sanctions, Myanmar’s domestic banking sector remains ill-equipped to provide services to locals, let alone globalfirms.
While the licences are limited to one branch that can provide loans to foreign firms and only in foreign currency, they will give the winning bidders a strong foothold in what investors and economists see as one of Asia’s most promising markets.