YANGON: Four more foreign banks have been given preliminary approval to operate in Myanmar, state media reported on Sunday, the latest government attempt to attract overseas investment to the emergent nation.
Myanmar’s banking system was closed for decades to outside competition under junta rule, leaving the country laden with a creaking financial infrastructure and a populace deeply suspicious of banks.
But that has slowly begun to change since outright military rule gave way to a reformist government in 2011 that paved the way for last November’s landmark elections.
The four new banks that have been given initial approval are Vietnam’s Bank for Investment and Development, Taiwan’s E.SUN Commercial Bank, South Korea’s Shinhan Bank and the State Bank of India, the Global New Light of Myanmar said, quoting the Central Bank of Myanmar.
A total of 13 foreign banks have now been given permission to operate inside the Southeast Asian nation.
Most are still in the process of meeting regulations before opening branches but some are already up and running.
In April last year, Japan’s Tokyo-Mitsubishi UFJ became the first foreign bank in decades to open a branch inside Myanmar.
Among other banks that have opened branches are Japan’s Sumitomo Mitsui Banking Corp. as well as Singapore’s Oversea-Chinese Banking Corp.
Most of the foreign banks who have applied for licenses hail from the Asia-Pacific region.
Myanmar’s brutal military rulers nationalized all banks when they seized power in 1962 as they embarked on socialist policies that would send the economy into precipitous decline for nearly half a century.
Local people remain deeply reluctant to embrace the banking system and many deal only in cash.
Authorities have implemented sweeping political and economic changes in recent years that have seen most Western sanctions lifted, opening up the country to new streams of international investment.
Both the outgoing military backed government and Aung San Suu Kyi’s incoming National League for Democracy have vowed to increase capital flows to local businesses and to spur investment.
The World Bank has said firms cite access to finance as the main obstacle to doing business in Myanmar.