Thailand
Myanmar Central Bank wants Hundi money changers to be licensed
The chairperson of the junta-controlled Myanmar Central Bank, Than Than Swe, said she is putting pressure on operators of Hundi money transfers to stop making illegal transfers and get official licences for their businesses.
The comments were made in meetings she had with Hundi operators in the town of Muse on the border of China and the town of Tachileik on the border with Thailand.
The Hundi system of money exchange runs in parallel to official money exchange systems and is the preferred way for many workers abroad to send money back to Myanmar.
Someone sending money using the Hundi system gives a Hundi operator in their location their money and details of an intended recipient in a specific location, which is often in another country.
The Hundi operator will then contact an associate in the destination location and give them details of what has to be paid to whom. The Hundi operator in that location then gives the recipient, who is often identified by a special code, the transferred amount.
No money physically changes location instead the Hundi operator sending the money incurs a debt with the Hundi operator who pays the recipient out of their own money. The debt is then settled at a future date.
Than Than Swe said Hundi operators will need to get licences from the Central Bank if they want to keep operating in border areas like Muse and Tachilek. The director of the Central Bank’s Foreign Exchange Administration Department also explained the application procedure for obtaining an official money transfer license.
A Myanmar economist said that the central Bank’s plan would fail and Hundi operators would continue to operate without licences because the junta wants to control all foreign exchanges and this was just a way for them to do so.
In the 22 months since the coup Myanmar’s currency, the kyat has dropped in value from about 2,000 kyats to the US dollar to an informal rate of about 3,000 kyats to the US dollar on the black market, though the official Central Bank rate remains unchanged at 2,100 kyats to one US dollar.
Because of this unfair exchange rate, people sending money to Myanmar currently prefer to use unofficial channels like the Hundi system. It is another reason that Hundi operators would not want to have official licences as they would force them to use unrealistic official rates of exchange.
Than Than Swe also warned the Hundi operators that if they continued to make unofficial money exchanges they may lose their money, as the Central Bank is stepping up its measures against money laundering and the funding of terrorism.
On 21 October the Financial Action Task Force (FATF) announced that it had put Myanmar on its blacklist because it had failed to implement measures to fight against money laundering and financing terroris
Source: https://www.mizzima.com/article/myanmar-central-bank-wants-hundi-money-changers-be-licensed