CNI News
6 July 2024
Restraint and gentleness were needed in taking action against the private banks that lent housing loans more than the amount designated by the Central Bank of Myanmar, economic and banking experts told CNI News.
Although taking action against these banks was right, the authorities should tackle the problem restrainedly and cleverly or negative consequences could emerge, U Htay Aung Kyi, a banking expert, told CNI News.
" Theses private banks were wrong, but the government should tackle the problem restrainedly because the banking industry collapses, other economic industries will collapse. Action must be taken in a way that educates them. If they are forcefully suppressed, bad consequences will emerge. The Central Bank must gradually take action little by little. If they are taken action against at once, their customers will suffer. They should be given a period to solve the problem. Sometimes, there are many cases that cannot be taken action at once in the world." he said.
Taking action against relevant private banks regarding housing loans could not impact on housing loan borrowers and the private banks that have lent the loans mainly would have to solve it, he pointed out.
While demonstrating the housing loan
Private banks have been allowed to Lend housing loans with a loan term of more than (3) years, depending on the total bank loans in order to improve home ownership opportunities for the people.
However, seven private banks have lent housing loans excessively to make them more profitable, violating the instruction of the Central Bank, said in the statement released by the government.
Officials concerned will supervise in order to go back to the terms and conditions related to housing loans that was released by the Central Bank within the period designated reportedly. As more taxes had to be paid when buying real estate, more agricultural lands were being bought, a real estate agent told CNI News.
" As the current real estate transaction, rather than real estate transaction with full documentation, farmlands are bought or sold, filling over the farmlands with ground at a lower price. To tell you frankly, it's difficult to apply for property document. So, transactions are being conducted with promissory notes. Because regional departments are also corrupt, it might be difficult to solve them sometime in the future." he said.
According to Section 154 of the Financial Institutions Act of the Central Bank, the private banks that lent the loans more than the amount designated would have to pay effective fines and officials from the Central Bank who were weak in supervising private banks would be taken action against, said in the statement.
Taking administrative action contains warning, fining, restrictions on the operations of financial institutions, suspension or cease of serving in financial institutions.
