Financial Crime World

Myanmar’s Central Bank Issues Directive on Compliance Training for Non-Financial Professionals

Yangon, August 26, 2022

The Central Bank of Myanmar (CBM) has issued Directive No. 8 of 2022 on non-bank financial institutions (NBFIs), effective from the date of issuance.

Eligibility to Establish an NBFI

To be eligible for establishing a wholly-owned NBFI in Myanmar or entering into an NBFI joint venture with a local partner, foreign financial institutions (FFIs) must meet certain criteria:

  • Registration as a foreign corporation under the Myanmar Companies Law
  • Minimum capital contribution of US$10 million, with documentation providing particulars of the source of funds and confirmation that the funds have been cleared by relevant authorities
  • At least three years of experience in the financial institution industry
  • Audited financial statements for the preceding three years
  • A business plan and feasibility study, including budget estimates, for the next three financial years
  • Resolution from the parent company’s board of directors approving the establishment of an NBFI in Myanmar
  • Commitment to comply with relevant Myanmar laws, including anti-money laundering and counter-terrorism regulations

Registration Certificate

The CBM requires a range of information and documentation to issue a registration certificate. The six-month review period begins from the date of application, during which time reasons for rejection will be provided in writing. If approved, the FFI must commence business within 12 months of receiving the registration certificate.

Board Appointments and Prior Approval Matters

The directive also outlines criteria for appointing directors to the NBFI’s board and matters requiring CBM approval, such as:

  • Branch openings and closures

Registration Certificate Revocation

A registration certificate may be revoked by the CBM in certain circumstances outlined in the directive. Additionally, an NBFI is prohibited from accepting deposits under section 2(x) of the Financial Institutions Law.

Conclusion

This directive underscores the importance of compliance training for non-financial professionals in Myanmar to ensure effective implementation of regulatory requirements.