03

OCT
Foreign banks allowed to offer loans with 10-13 percent
interest
Foreign banks that have just been granted permission to operate in Myanmar will be able to offer loans in kyat but
within an interest range controlled by the Central Bank of Myanmar. Advertisement for Bangkok Bank in Yangon.
Photo: Nyain Thit Nyi/Mizzima
The nine foreign banks granted Myanmar banking licences on October 1 will be allowed to offer loans to foreign
and local companies in kyat with interest rates fixed by the Central Bank of Myanmar to a range between ten and
13 percent, said a Facebook post by economist U Khin Maung Nyo quoting the CBMs deputy governor, U Set
Aung.
U Set Aung confirmed to Mizzima on October 3 that he had supplied this information to the economist.
If the Central Bank cancelled fixed rates, the country would suffer the impact of higher interest rates, said the
notes from U Set Aung.
He added that if foreign banks were to provide loans in US dollar, the central bank would not impose fixed interest
rates.
Those banks can loan to [foreign and local companies] with their own interest rates based on the interest rates of
US dollars in the international market, and subject to the credit rating of the borrowers, said U Set Aung.
U Set Aung added that he believed the current level of
interest rates in Myanmar was on par with its regional
neighbours.
Speaking at a press conference held at the CBMs
Nay Pyi Taw office on October 1, U Set Aung said the
foreign banks were awarded preliminary approval to
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operate in Myanmar and these banks have 12 months
to comply with MCB requirements before they are
awarded a final licence.
He added that they will be allowed to operate just one
branch in country, cannot engage in retail banking
and will be required to invest a minimum of US$75
million (K75 billion) of contributed capital.
As for providing loans to local companies in local
currency, foreign banks are required to cooperate with
local banks in the form of a syndicated loan, said U
Set Aung.
CORRECTION: This article corrects the previous
version that stated that U Set Aung posted these remarks on his own Facebook page and that foreign banks are
allowed, rather than required to cooperate with local banks when providing loans in kyat to local companies.
Last modified on Friday, 03 October 2014 15:40
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Page 2 of 2 Foreign banks allowed to offer loans with 10-13 percent interest
05/10/2014 http://www.mizzima.com/business/investment/item/13380-foreign-banks-allowed-to-...