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Finance and Banking Myanmar's financial structure includes State and private banks and a State insurance institution. The State banks are the Central Bank of Myanmar and four major specialized banks, namely, the Myanmar Economic Bank which provides countrywide domestic banking and services, the Myanmar Investment and Commercial Bank which renders both domestic and foreign exchange transactions, the Myanmar Foreign Trade Bank which deals in foreign exchange transactions, and the Myanmar Agriculture and Rural Development Bank which provides seasonal and term loans for agricultural and livestock breeding. The Savings Bank Law was enacted in June 1994. The Small Loans Department was separated from the Myanmar Economic Bank and was set up as a finance company, namely, the Myanmar Small Loans Enterprise, which deals in pawn-shop operations. The Myanmar Insurance is the sole insurance institution in Myanmar and presently underwrites various kinds of insurance.
      In accordance with the new banking laws, the Central Bank of Myanmar has granted operating licences to 17 domestic private banks and permission to open representative offices to 32 foreign banks.
Central Bank of Myanmar The Central Bank of Myanmar Law (1990) empowers the Central Bank of Myanmar to operate with relative independence and to exercise supervisory and regulatory authority over a wide range of financial institutions, both State and privately-owned. In particular, the Central Bank is also empowered to set reserve requirement, maximum discount rates, maximum and minimum interest rates on loans and deposits, asset and liability ratios and minimum cash margins. In this regard, the stipulations are applicable uniformly to all financial institutions without discrimination. Thus, the Law enables the Central Bank to rely less on quantitative credit control but more on indirect instruments of monetary control including the use of reserve ratio and interest rate policy. It also includes provisions governing the relations of the Central Bank with the Government, measures and procedures to formulate and implement monetary policy, implementation of exchange rate policy and control of foreign exchange transactions and the powers of the board of directors to ensure the effective performance of the Central Bank.
      The Financial Institutions of Myanmar Law (1990)provides for the establishment of financial institution, whether State-owned, jointly-owned by the State and private or private, to perform financial activities with the permission of the Central Bank.
Exchange Management The purpose of exchange management is to conserve the available foreign exchange reserves of the country. Exchange management is administered by the Controller of Foreign Exchange of the Exchange Management Department of the Central Bank of Myanmar and the Exchange Management Board in accordance with the instructions from the Ministry of Finance and Revenue. Both exportation and importation of kyat are prohibited. The Kyat is not negotiable abroad. All external payments are subject to authorization. All export proceeds and invisible receipts must be declared to the Myanmar Foreign Trade Bank at present.
Exchange Arrangement The currency of Myanmar is the Myanmar Kyat, which is pegged to the SDR at K9.50847 = SDR1. Myanmar applies margins of 2% in respect of spot exchange transactions, based on the fixed Kyat-SDR rate. The buying and selling rates of Kyat for the Deutsche mark, the French franc, the Japanese yen, the pound sterling, the Swiss franc, and the US dollar quoted by the Myanmar Foreign Trade Bank are determined on the basis of the daily calculations of the value of these currencies against the SDR. Buying and selling rates for other currencies such as Singapore dollar, Italian lira, Hong Kong dollar, Netherlands guilder, etc. are determined on the basis of appropriate cross rates in different money markets of various geographical regions. There are no taxes or subsidies on purchases or sales of foreign exchange. There are no arrangements for forward cover against exchange rate risk operating in the official or the commercial banking sector.
      The Central Bank of Myanmar has issued Foreign Exchange Certificates (FECs), of equivalent value to the US dollar, since February 1993, in order to enhance the foreign exchange earnings and for the convenience of tourists. FECs can be used by both residents and non-residents alike for any type of payment within the Union of Myanmar. Tourists entering Myanmar are required to exchange compulsorily the prescribed minimum amount of US$300 with 300 FEC units, which will not be reconverted at the time of departure from Myanmar. However, in the case of unutilized balance of the FECs exchange above the 300 FEC units, the balance will be reconverted at the time of departure on presentation of the FEC Voucher at the exchange counters. FECs are exchangeable with US dollar or pound sterling or with the acceptable Traveller's Cheques. Myanmar residents who own foreign currencies are permitted to exchange them with FECs, but they cannot reconvert their FECs into foreign currencies. However, any Myanmar resident who owns a minimum of 100 FEC units is allowed to open a new foreign currency account or to deposit them into his existing foreign currency account at State-owned commercial banks on payment of a 10% service charge. The banks concerned will then credit the credit the remaining 90% value of FECs into the US dollar denominated foreign currency account of the individual Myanmar resident. The organizations which are authorized to obtain FECs from the Central Bank of Myanmar are the State-owned commercial banks, state-owned hotels holding money changer licence and private individuals who hold FECs changer licence. FECs cannot be sold for Myanmar Kyat.
      Effective 29 th April 1993, foreigners and non-residents can bring into Myanmar at any one time from any place abroad, any foreign currency not in excess of US dollars two thousand or its equivalent without making a declaration to the Customs on arrival.
The Myanmar Agricultural and Rural Development Bank The Myanmar Agricultural and Rural Development Bank (MARDB) is one of the State-owned banks. It was established in 1953 as the State Agricultural Bank (SAB) and later had its name changed to Myan Agricultural Bank in 1976. Under the MARDB Law enacted in July 1990, the bank will support agricultural, livestock and rural socio-economic enterprises including production, processing, storage, distribution and marketing activities relating to agro and livestock based industries. It has a countrywide network of 14 regional offices, 164 branches and 48 agency offices. It provides short and long term credits to 2.5 million farmers for crop production, salt production, livestock, fish and dairy farming, etc. The Rural savers get 10% interest on their deposit and each farmer is allowed to borrow up to four times his savings at 15% interest for farm development expenditures such a purchase of water pumps and farm implements, etc.
The Myanmar Economic Bank The Myanmar Economic Bank was established in 1976 for the purpose of developing general commercial and industrial banking. It also acts as a fiscal agent of the State. It provides nationwide commercial banking with 259 bank branch offices. The functions of the bank include accepting current accounts, savings deposit accounts, and other accounts issuing savings certificates, advancing loans to economic enterprises in all sectors of the economy, financing private business undertaking such as production, trade and services as well as providing personal loans. It also acts as the agent of the Central Bank of Myanmar for the operation of currency chests throughout the country. It also entrusted with the maintenance of the accounts of the Government Departments and State Economic Enterprises.
      The Myanmar Economic Bank has handed over the small loans business to Myanmar Small Loans Enterprise with effect from 1993/94. Foreign Exchange Certificates issued by the Central Bank of Myanmar promoting tourism industry are being handled by the Myanmar Foreign Trade Bank, Myanmar Investment and Commercial Bank and the Myanmar Economic Bank branch offices. Foreign exchange counters, state-owned hotels and private individuals hold FEC Changer Licence. For the promotion of border trade, licensed Myanmar Economic Bank branches in six townships are handling foreign exchange currency accounts.
Future Programme The Myanmar Economic Bank is planning to extend its banking business from domestic commercial banking to international financial services.
The Myanmar Foreign Trade Bank The Myanmar Foreign Trade Bank is to conduct foreign exchange operations arising out of external trade as well as non-trade foreign exchange operations. The bank may enter into or execute contracts relating to payments and receipts of foreign exchange, and may also maintain clearing accounts under bilateral counter-trade agreement.
      The bank is authorized to conduct business of international banking and domestic banking. Some of the services the bank is allowed to conduct are: accepting deposits in Kyat and foreign currencies, giving loans and advances: both secured and unsecured, issuing, accepting, discounting, buying, selling and collecting all securities including bills of exchange, all matters relating to letter of credit, sales and purchases of travellers cheques and foreign currencies; all matters relating to international fund transfers and bank guarantees; accepting valuables for safe keeping, making status enquiries and osbtaining status reports on local and foreign firms and banks.
Future Programme The Myanmar Foreign Trade Bank is planning to change gradually from a specialized bank into a general commercial bank. The initial steps taken are the acceptance of current deposits from individuals and firms, and arrangements are being made for financing of export trade.
Foreign Correspondent Bank The Myanmar Foreign Trade Bank has long established correspondent relationship with first class international banks in all the major financial centres of the world. In addition, through a network of over 120 correspondent banks in 58 countries, banking transaction can be made with almost any country in the world.
The Myanmar Investment and Commercial Bank The Myanmar Investment and Commercial Bank was formerly established in 1989 within the organizational structure of the Myanmar Economic Bank. It has become a separate entity as a State-owned Financial Institution in Myanmar under the Financial Institutions of Myanmar Law, 1990. It provides investment, development and commercial banking facilities to local and foreign investors, organizations, partnership firms, joint ventures, limited companies, sole proprietorships and exporters established and doing business in accordance with the existing laws of Myanmar. It has provided bank advances to foreign and local investors for the purposes of processing and manufacturing, building and engineering, transport and public utility services, distributive trade and marketing, overseas trade in exports and for personal and professional purposes. It has also extended branch banking facilities to Mandalay.
Myanmar Small Loans Enterprise The Myanmar Small Loans Enterprise was established as a separate entity, formerly under the Myanmar Economic Bank. This enterprise was established in accordance with the market-oriented economic policy with a view to promoting and enhancing efficiency of financial activities. A network of 182 branches has been established throughout the country to facilitate financial transactions.
Emergence of Domestic Private Banks In accordance with the new banking laws, the Central Bank has already granted banking licences to 17 domestic private banks, up to 1st July 1995, to operate commercial banking activities. These banks are as follows: Banks

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