On 3 February 2015, the Monetary Authority of Singapore (the “MAS”) announced that the Central Bank of Myanmar (the “CBM”) and the MAS will enter into a Memorandum of Understanding (“MOU”) to strengthen bilateral cooperation. The two central banks will work together on matters relating to banking supervision and capacity building.
By way of background, Myanmar started liberalising its banking sector in 2014. In October 2014, the CBM issued nine foreign bank licences to allow foreign banks, including two Singapore banks, to offer wholesale banking services to foreign corporates, and financial and technical support to Myanmar’s domestic banks. The licence allows each bank to open only one branch in Myanmar.
This MOU demonstrates the strength of the ties between the two central banks. As the banking sector develops in Myanmar, the demands on the CBM to be able to deal with a wider and more complex range of issues and an increasingly sophisticated market will rise. This MOU will enable the CBM to have the benefit of being able to gain from the MAS’s experience in dealing with some of the issues, and the two central banks can also work together to grow and strengthen the sector for the benefit of both consumers and banks. Knowing more about how the MAS regulates the banking and finance sector in Singapore will benefit financial institutions from Singapore as the CBM will feel more confident about their strength in depth and ability to operate in Myanmar.