Myanmar Industry Overview



The banking sector in Myanmar consisted of mainly state-owned banks and non-state-owned banks were not allowed until the 1990s. The Government established the Union Bank of Burma and The People’s Bank of the Union of Burma Act was enacted in 1967. A monolithic bank known as the People’s Bank of the Union of Burma was established in 1969. After 1988, Myanmar economic system has been transformed from the planned economic system to market oriented system. However, today non-state-owned banks, semi-government, and private banks represent 80% of the market shares (GIZ, 2013). Most of the private banks now have very extensive number of branches (more than 300). At the end of FY 2012- 2013, there were 19 semi-government and private banks in Myanmar.
Up to now, 13 foreign banks were awarded banking licensing in Myanmar, their services are limited to non-resident companies. Foreign banks made engagements with local banks to provide financing through local banks. The foreign banks can provide confirmed letters of credit from the seven Myanmar banks discounts and provides short-term financing to the extent required. The most commonly used international payment methods are open account, advance payment, consignment, collection, and letter of credit (L/C). Inward and Outward Remittance services are also one of the major services provided by the banks along with payroll service, electricity billing service, Internet banking services and mobile banking services.

Opportunities and Barriers

Since Myanmar uses a managed float exchange system, Myanmar traders face a lot of challenges and take risks related their foreign currency receivables and payables. Almost all of the commercial loans are securitized with the loan amount, which cannot be more than the 80% of the force sale value of the collateral. This has been making access to finance for SMEs difficult. The sector’s overall physical, mobile and Internet operation platforms are not fully integrated yet for the upmost convenience of user experience. With the higher Internet and mobile penetration rates, the country is trying to leapfrog the banking technologies and cash mobilization process.

Legal & Regulatory Framework

Central Bank of Myanmar is the main regulator of banks and its has duties such as Acting as to role issuer of domestic currency and as a banker to the Government and as an adviser to the Government in respect of economic matters. It also inspects and supervises the financial institutions, performs as a banker for the financial institutions and manages the international reserves of the State and to perform the transactions. Some of the laws enacted to regulate the banking sector are The CBM law (2013), Financial Institutions Law (2016) and the Foreign Exchange Management Law (2012). There are also many directives for specific financial institutions and policies related to financial sector set by both CBM and the Ministry of Finance.


Collection of Papers on Myanmar’s Financial Sector, A joint publication of GIZ-Myanmar and Thura Swiss, January 2016

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