The Central Bank of Myanmar is set to initiate a third round of foreign bank licensing in a bid to further open up the banking sector.
In the upcoming round, the central bank will issue two types of licences to lure foreign players.
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A branch licence will allow the international lenders to offer wholesale banking permissible products and services. It requires a minimum paid-in capital of $75m, with $40m locked up for two years with the central bank.
Banks can also apply for a subsidiary licence, with which they can offer wholesale banking initially as well as retail banking services from 1 January 2021.
Such banks can begin operations with a minimum paid-in capital of $100m and establish up to 10 branches.
Additionally, foreign players, with existing branch licences, can convert to subsidiary from June of next year. Such banks that have operated as a branch for three full years in Myanmar are eligible for conversion.
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By GlobalDataThe central bank will soon issue Expression of Interest (EOI) to advance with the licensing process.
From January next year, Myanmar is also planning to relax the foreign bank ownership limit of 35% in local lenders on a case by case basis.
The Central Bank of Myanmar completed the first round of licensing in 2014, followed by another round in 2016.
Overall, 13 financial institutions received regulatory approvals to carry out onshore wholesale banking business.
