CNI News

26 Mar 2023

The collapse of some banks in western countries like the US and Switzerland will not affect Myanmar banks, according to economic observers.

The Central Bank of Myanmar has guaranteed that it will address the crises of all banks if they are in danger of collapse and Myanmar banks are not likely to collapse because no banks collapsed even during the political crisis, Economic Observer  U Thet Zaw told the CNI.

He said,"Basically, one country is different from another. In Myanmar, the CBM has guaranteed that it will address the crises of banks if they are in danger of collapse. Deposits will not be lost. Normally, customers don't need to be worried about their deposits. No banks collapsed even during the political crisis. Under the current normal circumstances, banks are highly unlikely to fall. They are likely to collapse when loans are not repaid. However, the CBM has prevented such scenarios by requiring banks to submit daily reports to it. There will be problems when borrowers cannot repay loans from banks."

As banks in Myanmar have been able to address bad loans in successive eras and no banks have collapsed but it is important to tackle the issue, Banking Expert U Htay Aung Kyi told the CNI.

People waiting to withdraw money from KBZ Bank.

He said, "The impact of the fall of banks in other countries is another issue.  Myanmar banks have their own problems known as non-performing loans. As authorities have tackled the issue prudently, the situation has not exacerbated. The central bank has guaranteed that all deposits will not be lost. The collapse of banks in other countries is not likely to affect us because we have only a few transactions with them. I don't think it will affect us. It is more important to focus on our own problems.

He said that the CBM has been regulating banks to help prevent them from collapse, banks are required to maintain sufficient levels of cash and experts are required to develop policies to create favourable economic, political and legal environments.

Due to political changes, local banking operations have been delayed and limited amounts of deposits are allowed to be withdrawn.

Although banks have allowed their customers to withdraw larger amounts of deposit, it is still difficult to say that banking operations in Myanmar have returned to normal.