Developing Myanmar’s Finance Sector to Support Rapid, Inclusive, and Sustainable Economic Growth
This paper presents broad outlines of a reform strategy to develop a stable and efficient finance sector that supports rapid and inclusive growth in Myanmar. It states that a well-functioning financial system must intermediate efficiently between savers and borrowers, manage risks prudently, provide a wide variety of financial services, mobilize savings efficiently, lend for sound investments, and ensure access to finance is available to all. The paper also provides a brief overview of the financial sector in Myanmar with a focus on key stakeholders, pressing challenges, and ongoing banking reforms. Some of the key recommendations provided in the paper to enhance the financial sector in Myanmar include:
- Initiate implementation of Central Bank of Myanmar's electronic system for automated clearance, payments, and settlements system;
- Permit commercial banks to compete on service standards and fees, including fees for remittances;
- Initiate study of legal, regulatory, and institutional needs to support the rapid expansion of branchless banking;
- Review the MFIs sector and the appropriateness of the current legal, supervisory, and licensing system;
- Work with the World Bank and Asian Development Bank to prepare a state bank restructuring strategy, based on the audit results of the four state banks.