YANGON May 27 Some foreign banks may be allowed
to operate in Myanmar later this year although initially they
will only be allowed to have branches in certain areas and offer
a limited range of products, government and banking sources said
"The president last week formed a committee to choose five
to 10 out of about 40 foreign banks who have opened
representative offices in our country," a senior government
official involved in the plans told Reuters on Tuesday.
"We plan to select suitable ones soonest and give them a
limited licence so that they can start operations before the end
of this year," he added.
Led by central bank governor Kyaw Kyaw Maung, the committee
comprises senior government officials including the deputy
finance minister, deputy attorney general and central bank
Myanmar is going through a period of dramatic reform after a
military government stepped aside in 2011. Western governments
have dropped or suspended sanctions, allowing foreign firms to
move into what is practically a virgin market for many products.
Some local banks have resisted the arrival of foreign
competition, saying they are at a big disadvantage because
foreign lenders are far bigger in terms of capital, have better
technology and much more experience in modern banking.
Lawmakers close to these bankers have tried to block the
government's plan to allow selected foreign banks in but another
senior official, who asked not to be named, said they appear to
"Since the president has set up this committee now, allowing
foreign banks to operate is just a question of which. It's no
longer a question of if. I'm sure it will happen before the end
of this year," he said.
He added that local private banks should not worry because
the foreign banks would only be granted limited licences.
"We do understand their concerns but, on the other hand,
it's quite impossible to attract investment from big foreign
companies if international banks are not allowed to operate
here," he said.
Than Lwin, vice-chairman of top local private lender KBZ
Bank and a former deputy governor at the central bank, said he
was reassured by the fact that the foreign entrants would be
restricted in their operations.
"Under the limited licence, these foreign banks will be
allowed to open limited numbers of branches in limited areas to
offer their customers limited banking products," he said.
(Reporting by Aung Hla Tun; Editing by Alan Raybould and