Myanmar

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Government of the Union of Myanmar Ministry of Finance and Revenue Myanma Economic Bank

A Brief History

The Myanma Economic Bank (MEB) has descended from the State Commercial Bank (SCB), established in 1954, which provided a wide range of commercial banking services across the country. There was a change in political economic systems of the country in 1962, transforming the system into a planned economy. This change brought a nationalized monolithic banking system in the 1960s. All the banks were pooled into that mono-bank called the People's Bank and the SCB became a unit of that bank, undertaking commercial banking operations. Following a commercialization process, that banking system was reorganized in 1975, with the formation of four state-owned banks, namely, the Union of Burma Bank, the Myanma Economic Bank, the Myanma Foreign Trade Bank and the Myanma Agriculture Bank. Since then, the MEB operated domestic commercial banking businesses.

The market economic system revived again in Myanmar in 1988. Consequently, the financial sector took steps to reform in accordance with the new economic system. In furtherance of the development of the market-based economic system, the new banking laws, namely, the Central Bank of Myanmar Law, the Financial Institutions of Myanmar Law (FIML), and the Myanma Agricultural and Rural Development Bank Law were enacted in 1990.The MEB has been administered by the FIM Law Since July 1990. It has continued as a state-owned financial institution, providing a wider network service of banking businesses.

New Venue of MEB Head Office

MEB Managing Director's Office moved to Nay Pyi Taw in February, 2006.  MEB controlling/operating branches in Yangon, Mandalay and all State and Divisions continue their operations as usual.

Organizational Structure

MEB is under the purview of the Ministry of Finance and Revenue. Managing Director is the Chief Executive Officer of the bank. . Four General Managers support the Managing Director, taking charge of duties delegated to them. Currently, it has 703 officers and 8557 staff members.  MEB has 3 Executive Committees, namely, the Management Committee, the Advisory Committee and the Credit Committee. The highest executive powers of the MEB are vested in the Management Committee. It makes policy recommendations for causing better banking services. It sees to the bank's daily operations and gives directions as necessary, so as to cause smooth functioning of the bank. The Advisory Committee gives advice to the Managing Director for administrative purposes. The Credit Committee provides recommendations for the credit policy of the bank. It scrutinizes loan proposals as well. MEB includes 6 Head Office Departments, 13 State/ Divisional Offices, 297 Branches and 1 Savings Agency Office.

MEB's Organizational Chart

Paid-up capital

MEB's paid-up capital of kyat 420 millions was fully subscribed by the State.

Functions

It provides commercial banking services as well as development banking services. It renders banking services to both of the private sector and the state sector. MEB's major functions include the followings-

-accepting current and time deposits
- lending money
- collecting and dealing in cheques and other instruments
- granting and issuing of letters of credit and traveler's cheques
- dealing in bullion and species
- dealing of foreign exchange
- purchasing and selling of bonds or other forms of securities on behalf of customers
- providing safe custody services
- collecting and transmitting money
- as the agent of the Central Bank of Myanmar maintaining currency chests across the country
- providing guarantee services and trustee business
- maintaining state funds accounts
- undertaking the disbursement of pension - undertaking the functions of Government Employees.

Interest Rates

Currently, Myanma Economic Bank offers an interest rate of 12% on saving deposits and saving certificates. It gives the same interest rate of 12% on (3) months, (6) months and (9) months fixed deposits. The Bank takes interests on loans and overdrafts at 17% and 16%, respectively. Interest rates on medium term loans and long-term loans are 16.5% and 16% respectively.

Banking Services in Foreign Exchange

MEB is authorized to deal in foreign exchange. It facilitates trade activities in border areas as well. At present, MEB undertakes the following services for cross-border trade settlements.

- Opening foreign currency demand deposit accounts both in Head Office and its authorized branches
- Foreign currency accounts transfer services
- Foreign currency remittances, both inward and outward
- Collection of foreign currency cheque, bills and payment orders
- Letter of Credit facilities for overseas trade
- Sales and purchases of foreign currencies to Government Departments in township areas and border areas
- Exchange of FEC with six major convertible foreign currencies and/ or with Traveler's Cheques
- MEB branches on border areas undertake border trade settlements by using the U.S. dollar and bank drafts.