Myanmar Banks Must Comply with New Regulations on Agent Banking Services
The Central Bank of Myanmar has issued a directive aimed at providing comprehensive access to financial services for those without access, increasing overall participation in the financial system while ensuring the safety and soundness of the banking system.
Key Requirements for Banks
- Submit detailed applications to the Central Bank, including information on the agent’s business history, infrastructure, and personnel, along with a service fee payment of 200,000 MMK per agent.
- Evaluate the proposed agent’s suitability, considering factors such as:
- Stability of their business over the past two years
- No history of borrower defaults
- Sufficient infrastructure and personnel for secure and effective banking services
Responsibilities of Banks and Agents
- Ensure that agents adhere to anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.
- Conduct regular inspections to verify compliance with AML/CFT regulations.
- Implement robust security measures to safeguard banking information.
- Provide operational guidelines and risk management training for appointed agents.
- Maintain internal control systems.
Requirements for Agents
- Provide information on their business operations, financial statements, and experience in the financial services industry.
- Report suspicious activities promptly to the bank.
- Adhere strictly to the terms specified in the agreement between them and the banks.
- Educate customers on security practices.
Authorized Banking Services
The new regulations outline authorized banking services that agents can offer, including:
- Cash deposits and withdrawals
- Domestic remittance
- Disbursement of pensions and social benefits
Monitoring and Regulation
The Central Bank will monitor and regulate banking activities, conducting investigations, requesting information from banks and appointed agents, and instructing banks to take corrective actions for agent misconduct.
Consequences of Non-Compliance
Non-compliance with the new regulations by banks and agents may result in action against them. The directive underscores the Central Bank’s commitment to promoting financial inclusion and ensuring the integrity of the banking system, aiming to extend the benefits of formal financial services to underserved populations and drive economic growth and prosperity across Myanmar.