2019 14 November

Myanmar Legal Update: New Round of Foreign Bank Licensing in Myanmar



With the Central Bank of Myanmar (“CBM”) conducting two rounds of foreign bank licensing in 2014 and 2016, Myanmar’s banking sector liberalization and modernization has been slowly progressing in sporadic phases. As of today, there are 13 foreign bank branches licensed to conduct business in Myanmar, though their business activities are largely restricted.

In 2017 foreign banks were allowed only to provide export financing to domestic exporters. It was only recently, earlier in 2019, that the banking sector was further liberalized and foreign bank branches were permitted to provide financing to local companies. Further, the retail banking sector which hitherto was closed to foreign banks is finally opening, which will see foreign banks offering retail banking products and services from 2021.

The CBM has, as a part of banking sector liberalization, recently through the announcement on 7 November 2019 (“Announcement”), initiated the third phase of foreign bank licensing. As per the Announcement, foreign banks with representative offices in Myanmar will be issued with either of two types of licenses: a Branch License or Subsidiary License.

To further the purposes of the Announcement, the CBM issued an Expression of Interest (“EOI”) on 8 November 2019 stating that it will be awarding a minimum five to a maximum of ten licenses to foreign banks with representative offices in Myanmar.

Scope of Licenses

As above, the CBM has proposed to issue two types of licenses to foreign banks namely; a Branch License and Subsidiary License. The key features common to both are:

  • Licensees will be permitted to serve both local and foreign financial institutions in addition to local and foreign corporates;
  • Licensees would need to contribute to the improvement and expansion of the domestic banking sector, by participating in the interbank market, lending to domestic banks, increasing financial education of individuals, engaging in foreign currency exchange and similar activities; and
  • Licensees will be permitted to grant loans and take deposits from corporates, banks, and individuals in foreign currency and in Myanmar Kyat (“MMK”).

In addition to the above, a Branch Licensee will be allowed to operate with just one place of business. However, the Branch Licensee would be required to pay minimum paid-in capital of USD 75 million out of which USD 40 million would be locked up with the CBM for a minimum of two years without bearing any interest.

In case of a Subsidiary License, the licensee would be compelled to maintain a minimum paid-in capital level of USD 100 million. Additionally, for the first time in Myanmar, the licensees will also be allowed to serve retail customers (individuals) from 1 January 2021. Licensees who are granted a Subsidiary License will be allowed to establish up to ten places for doing business that are branches or off-site ATMs. ATMs attached to a branch will not be considered as an additional place of business whereas standalone ATMs will be. Furthermore, for each place of business established in Yangon and Mandalay, foreign banks will be required to establish one additional location of business outside Yangon and Mandalay.

The EOI also mentions that the conversion of existing foreign bank branches into subsidiaries will be permitted from June 2020. However, it is necessary for a foreign bank to complete three years of activities as a branch in Myanmar before submitting a conversion request to the CBM.

Licensing Process

Foreign banks that want to apply for a license must follow the steps below:

  • The EOI needs to be submitted to the CBM via an email addressed to fbsc@cbm.gov.mm on or before noon of 18 November 2019.
  • Additionally, banks are also required to provide a duly completed copy of the Form A (EOI letter) and Form B (bank details).
  • The banks must fill the abovementioned forms in English and may submit the same in PDF format. A copy of the forms in Microsoft Word version using Word 2007 or above should also be submitted along with the PDF format.
  • All banks who have successfully submitted their EOI along with the forms will receive formal acknowledgement within 48 hours after the submission deadline via their contact e-mail addresses provided.

On 20 November 2019, the CBM will provide a detailed Request for Proposal (“RFP”) to all eligible applicants. The RFP will include further details in relation to the application procedures, assessment criteria and a Q&A process. The eligible applicants will have to submit their RFP Response by 2:00pm 20 January 2020.

All the applicants will have to pay a non-refundable license application fee of USD 75,000 within seven days from the date of receiving the RFP. Failure to comply with this requirement will result in immediate disqualification from the selection process.

Following submission of the responses to the RFP, the selection committee will evaluate and examine all RFP applications. Successful applicants will receive preliminary approval from the CBM. All applicants that end up successfully received the license (“License Recipient”) will have to pay a fee of USD 125,000 as the license awarding fee.

The preliminary approval will be followed by a transition period during which the operations have to be set up. Within this intervening period the License Recipient will have to undertake all measures that are necessary and crucial to ensure functional banking operations from the first day of business. The basic and most essential tasks to be completed during this phase would be the hiring of management and staff, completing potential capital raising efforts, preparing premises and finalizing policies and procedures for the bank’s activities. It is important to note that all License Recipients should address each and every condition that may be attached to the preliminary approval.


The financial sector in Myanmar is still at an emerging stage with less than 50% of the population having access to financial services. Though Myanmar has witnessed a steady rise in the banking sector, there remains a lot of scope for further growth and development.

Nonetheless, it can be said that Myanmar is making notable (albeit gradual) strides in affirming its strong commitment to accelerating its economy in line with the integration of ASEAN countries. This current move by the CBM is a welcoming one and it will gradually extend the scope of foreign bank activities in Myanmar, greatly promoting economic cooperation and the cause of national development.

DFDL Contact

William Greenlee

Partner & Managing Director

DFDL Myanmar


DFDL Authors

Nishant Choudhary

Deputy Managing Director

Head of Banking & Finance Practice

DFDL Myanmar


Rohan Bishayee

Legal Adviser

DFDL Myanmar


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The information provided in this email is for information purposes only, and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.