Central Bank ready to assist UAB in light of deposit run

Aung Thaung, chairman of Lower House’s MPs and Banks and Financial Development Committee and former minister for Industry-1, was blacklisted by the United States on October 31. 

As regards, customers began withdrawing their savings from UAB in which Nay Aung holds a 90% stake. This prompted the bank to hold a press conference on November 4 to explain the case.

Than Win Swe, CEO of UAB, told the press conference that the bank guaranteed all customers would not lose their savings.

Nay Aung did not appear at the press conference as he has gone overseas. Win Thaw, director-general of Myanmar Central Bank, did not attend the press conference but he replied over the phone.

“UAB has Ks 440 billion in total saving accounts while loans total Ks 231 billion. After the blacklisting announcement for Aung Thaung, customers made withdrawal of Ks 41 billion from their saving accounts on Nov 3 and Ks 26 billion on Nov 4. The rumours and customer fears made the bank see a big outflow of money from saving accounts. The gap between deposit and withdrawal was not much at Ks 10 billion. The UBA’s saving accounts at Central Bank of Myanmar are Ks 40 billion,” Than Win Swe said.

“In general, we have deposit and withdrawal between Ks 40 and 45 billion a day. We had Ks 44 billion deposits and Ks 41 billion withdrawals on Nov 3, while deposits were Ks 16 billion and withdrawals were 26 Ks billion on Nov 4. This remained normal status. The gaps were Ks 3 and 10 billion. We still have liquidity and if necessary, the central bank will render assistance,” Than Win Swe said.

He explained further that Nay Aung was not included in the US sanction list even after his father Aung Thaung was blacklisted.

The banks in Myanmar, which were included in the US sanction list, are State-owned Myanmar Economic Bank, Myanmar Foreign Trade Bank, Myanmar Investment and Commerce Bank, Innwa Bank and Myawady Bank, which is associated with Tatmadaw, privately-run AGD Bank owned by Te Za, and Ayeyawady Bank owned by Zaw Zaw. The UAB was not included in the US sanction list, according to the official data provided by the UAB.

“Like many banks in Myanmar, the UAB is still not allowed to have banking cooperation with US banks. But it has cooperated to do banking services with Commerz Bank, the biggest in Europe. It also has cooperation with 71 banking service providers in 23 countries in the Middle East and Asia. This is because it’s not included in the US sanction list. For that reason, customers should not worry about their savings,” Than Win Swe said.

“The Central Bank of Myanmar won’t clarify the situation of the UAB because of the rumour that Aung Thaung was blacklisted. If necessary to safeguard the customers’ savings, it might intervene in the crisis. Preparations have been made to draw money from Yangon, Mandalay and Nay Pyi Taw by paying tax fixed by the Central Bank of Myanmar,” Win Thaw said over the phone. 

“Nay Aung has been given permission from the government to build hydropower plants. He will jointly build upper Thanlwin (Mongton) hydropower project on Thanlwin River in cooperation with a Chinese company and it will generate 7,110 MW. Permissions have been given to him to implement four hydropower plants on Nawchankha River in Kachin State. Moreover, he also got the permission to build a commercial housing on Hsinphyushin Yeiktha on Pyay Road in Yangon. He is also running the businesses of timber extraction, natural gas and oil, hotel, gem, industry, services