CNI News

23 June 2023

USA has imposed sanctions on Myanmar Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB) with a view to restrict foreign currencies that will go to State Administration Council (SAC), which may adversely affact to local entrepreneurs more than SAC, said businessmen and analysts.

Garment industry, airlines, tourism industry,investment activities and trading businesses in Myanmar need to connect with MICB and MFTB banks for payment and tax payments. So, the sanctions may affact local businesses, said U Thiha Paing, founder of Via Logistics & Supply Chain, to CNI.

 Myanmar Foreign Trade Bank

"USA's sanctions have intended to affact MOGE and the Tatmadaw's businesses. But the sanctions impact on business elements more than SAC. If we legally work here, it will be convenient to connect with the government banks. There are still KBZ and AYA. But they are not as strong as the government banks. Moreover.although there are some branches of foreign banks, it may be difficult if they are compared with the government banks" he said.

" Here we have branches opened by foreign countries and also foreign banks. Some are going from project to project. It's a bit difficult for foreign cprporations when they pay the tax. The sanctions adversely affact many sectors such as oil and gas, electricity trading, energy, travel and tour, airline, metal mining, projects that really need to connect with the government, CMP industries, and investments" he said.

Over After USA has imposed on the two banks of Myanmar government, foreign currency exchange services in Myanmar have stopped temporarily due to comments that the value of dollar will probably rise.

"Because MFTB and MICB have been sanctioned, most of businesses in local and abroad must use other banks,said  U Thet Zaw, economy analyst, to CNI.

chairman of SAC meeting businesspeople

MFTB make decissions in trading matters. it needs to designate which banks are official. Ko Zaw Min Tun said that other banks can be used. But the central bank must permit." he said.

There is nothing to worry for Myanmar's banking industries because USA has imposed on MICB and MFTB. Usually, foreign currencies are being transferred, changed and depositted and USA is carrying out to make Myanmar get into economic and political crises, said Zaw Min Tun, spokesperson of SAC.

Although trade and investment activities work in connection with local private banks, only if these baks have a great deal of foreign currencies and at present, because private banks are weak in trade activities, hundi system will probably come back, said businessmen. The system is a verbal or written agreement to pay a stated sum, used as part of an informal system for transferring money.