Myanmar central bank stands firm as banks' last resort
The Central Bank of Myanmar reiterated its commitment to help private banks address liquidity shortage, following a rumour that some banks would be closed because of the shortage.
At the press conference in Nay Pyi Taw yesterday, Set Aung, the deputy governor of the CBM, flatly denied the rumour. He said that the rumour, which led depositors to withdraw money from banks in question, was groundless.
“We don’t know how the rumor started. The CBM has no plan to shut down any bank for the moment,” the deputy governor said. “The CBM stands ready to assist banks that need help. We are committed to provide full assistance to address their liquidity shortage.”
In a statement, the central bank also assured that all banks are operating in line with the rules and regulations. Warnings would be issued to those violating the rules and if such violations continue, they will face legal actions. The central bank also announced that together with the Home Affairs Ministry, it would launch an investigation into the source of the rumour.
Moe San Aung, managing director of KBZ Bank, was present at the press conference. His bank was a victim of the rumour.
It is among 22 local private banks operating in the country. Operating in the protective environment, they are still lacking knowledge and know-how to compete against foreign players, aside from small capital base. Transferring knowledge and know-how is a key condition levied on nine foreign banks winning the limited banking licenses last year.
“We hope that these banks would help Myanmar banks strengthen their presence in the home country,” CBM Governor Kyaw Kyaw Maung said at the opening ceremony of Singapore-based United Overseas Bank and Overseas-Chinese Banking Corp branches in Myanmar.
Ayeyawady Bank reportedly tried to expand its services to Singapore. The bank is still on the US sanctions list.
