YANGON/MUMBAI: The State Bank of India is among four new foreign banks given preliminary approval to open 100 per cent-owned branches in Myanmar, the latest move by the Southeast Asian nation to woo investment to the country long ruled by the military and hit by Western sanctions. The four new banks that have been given initial approval by the Central Bank of Myanmar are Vietnam's Bank for Investment and Development, Taiwan's E.SUN Commercial Bank, South Korea's Shinhan Bank and the State Bank of India. "After due consideration, the Licensing Committee has decided to grant preliminary approval to prepare for commencement of banking operations in Myanmar to four Foreign Banks," the apex bank said. The Central Bank of Myanmar said the preliminary approval is valid for 12 months during which the successful applicants will have to fulfil commitments made, take all necessary measures to ensure functional banking operation from day one of business and will have to comply with requirements laid down by the Central bank of Myanmar. "Upon fulfilment of the above-stated requirements the Central Bank of Myanmar will grant the final license (to the winners) to operate in Myanmar," the announcement said. This is the second time Myanmar has allowed foreign banks to open 100-per cent-owned branches inside the country in more than five decades following permits to nine foreign banks in October last year to operate in the country. In April last year, Japan's Tokyo-Mitsubishi UFJ became the first foreign bank in decades to open a branch in Myanmar. Myanmar's powerful military nationalised all banks when it seized power in 1962. Since 2011, authorities have launched political and economic reforms, prompting the West to lift most of the sanctions. Both the outgoing military-backed government and Nobel Laureate and Aung San Suu Kyi's incoming National League for Democracy have promised to allow enhanced capital flows to spur investment and promote economic growth. The State Bank of India is India's largest bank and it has branches in major world capitals and leading cities.
Vietnam's Bank of Investment and Development, E-SUN Commercial Bank, Shinhan Bank and State Bank of India have all been given preliminary approval to operate in Myanmar, as part of the government's latest attempt to attract foreign investment to the emerging nation. The move comes amid growing concern over Myanmar's human rights record following a crackdown on pro-democracy protests last year. Myanmar's banking system had been closed for decades to outside competition due to junta rule, leaving the country with a creaking financial system infrastructure and its people deeply suspicious of banks, however, this has been slowly changing since 2011.