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Myanmar: CBM to issue two types of licenses for foreign banks
The Central Bank of Myanmar (CBM) will issue two types of licenses—foreign bank branch license and subsidiary license– in the upcoming round of licensing, as from January 1, 2020, according to a statement.
This is the third round of foreign bank licensing since two rounds of stringent licensing process were successfully completed. Nine foreign banks got the greenlight in 2014 and four, in 2016.
They will be allowed to conduct onshore wholesale banking business. Over the past years, the central bank of Myanmar has initiated a process to open the domestic banking market to foreign banks.
For a branch license, the wholesale banking permissible products and services remain unchanged from the existing foreign bank branch licenses. Licensees will be allowed to establish one place of business only. A minimum paid-in capital of USD 75 million will be required for operation.
For a subsidiary license, wholesale banking activities will be allowed at the start of operations. In addition, onshore retail banking activities will be permitted under the subsidiary from the 1st of January. Subsidiaries will be allowed to establish up to ten places of businesses being branches or off-site ATMs. A minimum paid-in capital of USD 100 million be required for operation.
The conversion of existing foreign bank branch into subsidiary will be allowed starting from June 2020. Three full years of activities as a branch in Myanmar will be required before submitting a request for conversion to the central bank of Myanmar.
From the 1st of January 2020, foreign bank ownership into a Myanmar domestic bank exceeding 35 per cent of the capital of the domestic bank may be permitted on case by case basis.
In August, the CBM hired Roland Berger Company Ltd for the consultation services for the third round of foreign bank licensing.
Source: https://elevenmyanmar.com/news/cbm-to-issue-two-types-of-licenses-for-foreign-banks