Oct 17, 2011

State banks to open abroad: official

State-owned banks will soon open branches abroad in the latest move to bring international money remittances into the legal fold, a number of officials told The Myanmar Times last week.

Central Bank of Myanmar vice chairman U Nay Aye said Myanma Economic Bank, Myanmar Investment and Commerce Bank and Myanmar Foreign Trade Bank would open branches in Thailand, Malaysia and Singapore respectively.

U Nay Aye said that while he was not sure when the branches would open, the move was an attempt to give expatriate Myanmar workers in those countries less reason to use the illegal hundi remittance network and boost the revenues of those banks

“We are still examining what the benefits of opening international branches will likely be and we are also training our staff with the assistance of the Myanmar Bankers Association, which is providing one month of training to each employee,” he said.

He added that six private banks will be allowed to begin offering foreign currency accounts to clients soon, while currency exchange counters have already opened as part of efforts to combat the hundi network.

“We are discussing what we can do to prevent people using the hundi transfer network,” he said.

“The strong point of the hundi network, which we can’t match, is that transfers can be me at any time, even on weekends from any number of locations,” U Nay Aye said.

He added that private banks will in future be allowed to open foreign branches.

An MICB official said the bank’s management was discussing its plans with the Central Bank and would offer more information later.

“Our state-run banks do not yet have international branches but as we move further into a democratic system of governance we believe that international banks will contact us about opening branch offices with them,” he said.

A retired official from a state-owned bank said most bankers here have no experience with international banking practices, while their private competitors have none at all.

“Our domestic banking system should be made more practical and competitive. It needs better technology and must earn the trust of customers by providing better service than is currently offered. If this can be accomplished then there will be no need to transfer money illegally,” he said.

He added that the government should allow more foreign banks to open branches here to allow domestic banks – and bankers – to learn from them.

Source: Myanmar Times