Allowing domestic private banking business

     The Central Bank of Myanmar has granted licenses to open domestic private banks since May 1992. At the end of October 2001, 20 domestic private banks are in operation, providing commercial banking services to the public. Most are expanding their branches in major cities, as well as in border areas, the total of which has come up to over 200. Some of those private banks have introduced new types of facilities as issuance of credit card in local kyat, hire purchase, and installation of Automatic. Teller machines for easy withdraw 24 hours a day and the Point of Sales System Machines, accepting the opening of call deposits accounts, introducing safe deposit locker system, Trust Fund and gift cheque, travelers cheque services.

Permitting representative offices of foreign banks

     Since 1999 the Central Bank of Myanmar has issued licenses to foreign banks to open representative offices in Myanmar, and 28 foreign banks have opened their representative offices at end October 2001. They are six from Singapore, four each from Japan, France, and Malaysia, two each from Thailand, and Bangladesh and one each from Netherlands, Cambodia, United Kingdom, Brunei Darussalam, Korea and Germany.

Establishing the Myanmar Banks Association

     With the aim of promoting cooperation and cohesiveness among the banks and to promote the public habit of relying on banks and using banking services, the Myanmar Banks Association was established on April 1, 1999. The objectives of the Myanmar Banks Association are:
(a) To support the development of agriculture, industrial and trade sectors which play the main role in      nation building;
(b) To collaborate among banks for preserving the internal and external value of the Myanmar      currency, the kyat;
(c) To facilitate the leadership for cooperation among banks and for provision of the bank's      interests; and
(d) To initiate and promote the peoples' habit in dealing with banks.
     At present, the Association holds monthly meetings to discuss banking sector issues. It holds special meetings when and if necessary.

Provision of loans at preferential rate

     At present, the domestic private banks are encouraged to provide loans, individually or through syndications to local entrepreneurs involved in the agriculture and industrial sectors, at the preferential rate of 13 per cent with effect from 1 April 2000.

Cooperation with ASEAN Countries

     The delegations from the Central Bank of Myanmar have attended various ASEAN forums and meetings such as the ASEAN Central Bank Forum (ACBF), ASEAN Finance and Central Bank Deputies Meeting (AFDM), AFDM-Working Group Meeting, ASEAN+3 Finance and Central Bank Deputies Meeting, and discussed and exchanged views on macro-economic situations of ASEAN Countries.
     On 6 May 2000 in Chiang Mai, Thailand, the ASEAN+3 Finance Ministers agreed to establish a regional financing arrangement through currency swaps under the " Chiang Mai Initiative." The Chiang Mai Initiative (CMI) has two components:
(a) To expend the existing ASEAN Swap Arrangement (ASA) from the current five members to include      all the ten ASEAN member countries; and
(b) To provide a network of bilateral swap and repurchase agreement facilities among the ASEAN      countries, China, Japan and Korea.
     All the ASEAN countries, including Myanmar, have agreed to participate in ASA and to increase the total amount of the ASA facility from US $ 200 million to US $ 1 billion. Myanmar has agreed to commit US $ 20 million contribution to the facility of Extended ASEAN Swap Arrangement.

     The Basic Framework and Main principles of the Bilateral Swap Arrangement and Repurchase Agreement under the Chiang Mai Initiative have been agreed at the AFDM+3 Working Group meeting held in Beijing on 6-7 November 2000.

Organizing trainings and seminars

     For human resource development of the Myanmar banking sector, the Central Bank of Myanmar has been organizing seminar, trainings, workshops, etc in collaboration with foreign banks and financial institutions.

Reduction of the Interest Rates

     In order to control monetary expansion in support of combating inflection and promoting domestic savings which is the same time effectively allocating financial resources to stimulate the economy, the central bank rate was lowered to 10 per cent from previous 12 per cent with effect from April 1, 2000. Based on the central bank rate, maximum interest rates on deposits and loans were fixed at 10 per cent and 15 per cent respectively.

Issuance of government treasury bonds

     To allow the public more opportunities to save as well as to provide for the suptematic emergence of a capital market in Myanmar, the Central Bank of Myanmar, on behalf of the government, has been issuing 3 years and 5 years Government treasury bonds to the public since December 1, 1993 and total sales, of 3 years and 5 years government treasury bonds during April to September 2001 has reached kyat 8.68 billions. From the beginning of issuance to the end-September 2001, a total of kyats 144.395 billions worth of Government Treasury Bonds have been sold. 3 years and 5 years government treasury bonds bear interest rate of 8.5 per cent and 9.0 per cent annum respectively.