Myanmar banking regulations explained

Author: Ashley Lee | Published: 20 Jul 2015

The International Monetary Fund’s (IMF) recent warning about the growing levels of private lending in Myanmar comes against the backdrop of restrictions on domestic institutions. The Central Bank is now catching up with international regulations.

Myanmar’s banking sector is underdeveloped. Loans are typically short-term and require specific types of collateral. The country’s banks lack an interbank system to  effect transfers, and are dependent on cash inflows to fund their operations.

In a July 1 report, following the conclusion of its Myanmar mission, IMF representatives warned that credit in the private sector had grown rapidly; it observed a 36% increase year-on-year.

"The rapid liberalisation of the financial sector should be carefully managed despite its overall benefits," said the IMF’s Yongzheng Yang, following the mission. "These potential risks could affect the economy, given weak capacity and thin policy buffers."...


 

 

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