Myanmar Banks Fret Over Foreign Competition

Burmese Banks Fret Over Foreign Competition

banking

A stack of 1,000 kyat banknotes is seen, as employees count money at Yoma Bank in Rangoon. (Photo: Reuters)

RANGOON — Private Burmese banks are calling on the country’s Central Bank to be more transparent in plans to grant limited operating licenses to foreign banks next month.

After decades of isolation under a military junta, Burma’s banking sector is opening to foreign competition in a bid to attract foreign investment into the economy.

Executives at local banks are worried that their own operations will be affected by the change, but say they have been unable to prepare because the government has been opaque with its plans. “We only know what’s been reported in the media,” said Than Lwin, vice chairman of Kanbawza (KBZ) Bank.

Earlier this year, Reuters reported that an official document had been sent to more than 30 foreign banks with representative offices in Burma, showing that as many as 10 of them would be granted licenses by the end of September to set up one branch each to provide restricted services, including granting loans to foreign corporates.

But the Central Bank has yet to make a public announcement or send a notice to local banks about the number of foreign banks that will receive licenses and the services they will be allowed to offer.

Local bank executives are concerned foreign competition will create a human resources nightmare by pulling away the best staff.

“The main trouble is we don’t know what they are doing—whether they will allow only one branch or more for foreign banks. If they allow more, it will be a major concern for us,” Than Lwin of KBZ said. “If [foreign banks] are allowed to open branches in other cities, they will definitely recruit our skilled employees, so we need to prepare for this.”

Zaw Lin Htut, a banking expert in Rangoon, said foreign banks would likely recruit wholesale banking experts from local banks. “The human resources problem is no matter for other countries, but for us it’s a big issue,” he said. “We have a very limited number of skilled workers here.”

Chit Khine, chairman of Myanmar Apex Bank, agreed that it would be best from a human resources perspective if foreign banks were limited to operating just one branch.

“That would be no problem. They can bring their expertise from abroad, and Burmese bankers already working overseas can even come back to be employed here. But we still don’t know what the Central Bank will allow—that’s the major difficulty.”

“There will definitely be a salary problem,” he added. “Even if they don’t recruit our labor, their pay scale will be higher.”

The Central Bank could not be reached on Wednesday to confirm reports that it has sent a list to President Thein Sein with foreign banks that have been nominated to receive licenses. Based on recommendations from the World Bank, a minimum paid-in capital of US$75 million will be required by selected foreign banks, according to Reuters.


2 Responses to Burmese Banks Fret Over Foreign Competition

  1. Competition will bring in choices and choices will bring better customer services for us. That’s good. Poor service providers will lose and great service providers will grow up. It’s what democracy is all about.

  2. Myanmar s private Banks never followed the guidelines of Myanmar Government as how much one can change a day, which notes to change they just ignored the Myanmar Government to ensure highest profit only. Why should the Government follow their requests now ????
    It sounds near to ironic that the KBZ Vice Chairman U Than Lwin questions so much that they not know what the central bank will do,– of course that is a bit different from before where he and his Boss and all other Myanmar Bank owners knew everything before the public knew and could grow their millions and billions on these use to ” Insider Business “… Myanmar might just change a bit, not easy to digest for U Than Lwin ad friends….
    There is no reason for surprise and we all went through such ” Evolution ” already in Myanmar over 15 years ago, when near same and all now Myanmar private bank owner paid in their than Myanmar Hotels just the lowest of salaries of 6 $ US a month to 30 or 40 $ US a month for normal but trained and experienced Hotel staff, while at that time getting best revenues from room charges,- the by law compulsory 10 % service charge was near to never paid by the Myanmar owned Hotels where near all today Bank owner are same Hotel owner that time. Logically and from all witnessed all good even all half good staff of Myanmar Hospitality business went out of the country and worked for 500 to 2000 $ US in over sea and the best they even had than only superior of international standards where they were able to learn something of high quality.—— Myanmar Private banks – relax and just pay a bit for your mistakes and short term visions in human resources and capacity building,- you should not have some good staff which are than taken by foreign banks. All you staff should be good, great and well international trained bank experts – how else the customer could trust your bank otherwise. But with just the flip flop policies of most private Myanmar Banks as how much $ US or Euro one can change one time, how new or better just fresh printed a bank note must be, some of the worse service to guests and Band customers as from near all Banks as AGD Bank, KBZ, Oriental where the customer comes in with fear what the policy today might be on changing money, not by the staff but by management and owner.—– all this will bring the Myanmar Banks very quickly down once the ” Monopoly is over “,,, . Of course the good staff and all staff will go to better paid, better managed and better customer oriented Bank than near all the Myanmar private banks presenting since their existence….Good future so for you, after some time there will staff also come back to you,- but than well trained with an international banks and business ethics, that will be a time when you have chance to get back into business…// The Government is right to bring in foreign banks as just with the exchange of money banks as AGD Bank not even follows the Commerce or Finance Ministers, or Central Banks guidelines on the amount of money which one can change per day and so on,— why the Minister Finance etc should care than the Myanmar private banks ….. not logical….

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