The issue was brought up after fintech company Ok Dollar was given a Mobile Financial Services (MFS) license by the CBM in August, one year after it started operating, and raises questions on the Central Bank’s licensing procedures.

”As far as I know, Ok Dollar has been operating since June 2016 but is not connected to any bank. Yet, they have been operating unofficially for about one year before receiving a license in August,” said Daw Sandar Min.

Under the rules and procedures set by the CBM, fintech companies are permitted to transfer a limited amount of money. “But OK Dollar was providing unlimited money transfers to everyone before getting the license and the Central Bank did not take any action. The World Bank said this is a dangerous situation which encourages money laundering when the transfers are not regulated by the Central Bank,” said Daw Sandar Min.

License issues

Operated by the Myanmar-based e-commerce firm Internet Wallet, OK Dollar provides a service which enables users to deposit, withdraw, send and receive money using an online account or wallet. Users can also pay for a range of goods and services.

Ok Dollar started its business under a microfinance license while waiting for approval of its application for an MFS license from the CBM. Before receiving its license, OK Dollar claimed it already had 100,000 users.

More broadly, the issue draws light on the CBM’s licensing procedures for financial services and fintech companies in Myanmar.

“The mobile money business, which is becoming more common across the world, can make the public’s life easier. But the Central Bank should also manage and license the process systematically,” Daw Sandar Min said. “The other MPs of Yangon Region need to monitor this area carefully.”

The CBM currently issues two licenses for mobile-based financial service providers and fintech operators in Myanmar. The MFS license was first issued in 2016 and these are given to operator-led firms like OK Dollar, Wave Money and M-Pitesan.

The Mobile Banking license, which was issued in 2013, is awarded to traditional banks. Firms then operate under the bank’s license. For example, Thailand’s TrueMoney operates under AGD Bank’s Mobile Banking license.

Currently, a handful of other mobile financial services companies are applying for a Mobile Banking license, according to Minister of Planning and Finance U Myint Thaung. These include Ongo Mobile Money, which is applying to operate under Myanmar Oriental Bank’s Mobile Banking license.

According to the law, financial institutions without an official license to operate from the CBM are not allowed to provide money transfer services in Myanmar. The government can sentence firms that break the law to jail or issue fines.

Source: https://www.mmtimes.com/news/cbm-licensing-procedures-spotlight-yangon.html