Myanmar limits foreign hires in banks in troubled financial sector

Yoma Strategic Holdings

04/08/2021 09:49

By Shoon Naing
    BANGKOK, Aug 4 (Reuters) - Myanmar is limiting the number of
foreign staff allowed to work in domestic banks, a move that
industry sources warn could further impede financial development
in a country that had seen a boom in foreign investment before
the military coup.
    A letter dated Aug. 2 and posted on the central bank's
website said major banks can now employ no more than 25 foreign
staff, 15 at a medium-sized bank and eight at small lenders. 
    In addition, a bank must obtain authorisation 30 days before
hiring a foreign national and some senior posts must be held by
local citizens, it said.     
    Military authorities replaced the central bank's leadership
after the Feb. 1 coup against the elected government of Aung San
Suu Kyi, which sparked almost daily protests and fighting
between the army and newly formed people's defence forces.
    The country's banking sector has already been battered by
strikes amid a civil disobedience campaign to defy the military
and there have regularly been huge queues at branches as
residents try to withdraw cash.  
    Central bank deputy governor Win Thaw did not answer calls
seeking comment on the decision.
    Some other countries in Southeast Asia have placed limits on
the number of foreign staff at banks to encourage local hiring,
but the Myanmar central bank's letter did not mention if that
was its intention.
    A senior manager at one of Myanmar's biggest banks who asked
not to be identified due to the sensitivity of the issue said
there was still a crucial need for foreign expertise . 
    An executive at another Myanmar bank said limiting foreign
staff meant the banking sector would become more isolated and
could have less oversight.
    Myanmar had enjoyed a flurry of foreign investment in
sectors ranging from telecoms to consumer goods after an easing
of western sanctions as the country appeared to be opening up
and on a democratic path when Suu Kyi's party won polls in 2015.
    In the banking sector, foreign investors in recent years
include Singapore sovereign wealth fund GIC and Norway's
Norfund, which both have stakes in Myanmar's Yoma Bank.
    Yoma Bank, which is part of First Myanmar Investment, a
sister company of Singapore-listed Myanmar-focused conglomerate
Yoma Strategic Holdings  YOMA.SI , did not have an immediate
comment on the central bank's new rules.    
    Sanctions have stalled inflows of investment to Myanmar, and
foreign companies doing business there face pressure from rights
groups and Myanmar's parallel civilian government to ensure
payments do not flow to the military government.   

 (Additional reporting by Aradhana Aravindan in Singapore
Writing by Ed Davies; Editing by Simon Cameron-Moore)
 ((Ed.Davies@thomsonreuters.com;))