Banking and Finance
August 19 2013

New Myanmar Central Bank Law (2/4)

This page is more than 2 years old. Visit DFDL Insights for the latest legal news.
On 12 July 2013, Myanmar’s president approved the New Central Bank Law. The main feature of the New Central Bank Law is that the Central Bank of Myanmar will be an autonomous body, acting more independently from the Ministry of Finance. This relaxation in regulation and control seems to indicate the opening up of the banking industry to more international participation.

The New Central Bank Law repeals the Central Bank of Myanmar Law of 1990. However, the Rules, regulations, bye-laws, orders and directives made or issued under the repealed Central Bank of Myanmar Law remain in force, in so far as they are not inconsistent with the provisions of the New Central Bank Law, or are not repealed or superseded.In accordance with the New Central Bank Law, issuing rules and regulations governing the Central Bank of Myanmar will have to be adopted within three months (i.e. 12 October 2013), in order for the law to come into effect. A senior bank officer, Win Hteik, mentioned that in fact, rules and regulations have already been drawn up and that we may expect them to emerge sooner than expected.

The Myanmar government has indicated that the rules and regulations may provide foreign banks with opportunities to participate in Myanmar’s banking industry. Deputy Finance Minister Maung Maung Thien mentioned that these rules and regulations may allow foreign banks to operate in Myanmar through joint ventures. In February, President Thein Sein also announced that foreign banks may be permitted to enter Myanmar with majority-owned joint ventures with local banks. These joint ventures would then eventually be followed by wholly owned subsidiaries and then full branches. However, the regulatory and licensing structure for foreign banks remains unclear.

The opening of Myanmar’s banking sector for foreign banks would be a significant evolution since, so far, foreign banks are currently restricted to setting up representative offices only.

Other Key Myanmar Legal Updates – July/August 2013

Myanmar Securities Exchange Law (¼)
Myanmar New Central Bank Law (2/4)
Myanmar Accedes to the New York Convention (¾)
New Myanmar Citizens Investment Law (4/4)
Contact
Ms. Regula Schmidhauser
Business Development Manager
Myanmar, Thailand and Lao PDR