Myanmar’s Banking Sector in Crisis: Cash Shortage Worsens Amid Military Rule

YANGON, MYANMAR - Seven months after Myanmar’s military seized power in a coup d’etat, the country’s banking sector is facing a severe crisis. The junta’s violent repression and economic restrictions have led to widespread uncertainty and fear among account holders about the security of their savings.

Cash Shortage Worsens

The kyat is depreciating rapidly, commodity prices are rising, and cash transfers have become increasingly difficult. Long lines now form daily for withdrawals, which have been capped at 300,000 kyats (U.S. $180) per day from ATMs and 200,000 kyats (U.S. $120) per week from savings accounts to prevent a run on the banks.

• Many people are turning to moneychangers who offer cash up front for hefty fees.
• The junta has imposed additional controls on mobile banking accounts, warning that any found to be involved with the country’s shadow National Unity Government (NUG) would face unspecified legal action.

Experts Criticize Junta’s Exploitation of Financial System

Experts claim that the junta has been exploiting the country’s financial system to control the flow of funds and punish those opposed to its rule. The Central Bank, once seen as independent, now appears to be following the orders of the military regime without any independent decision-making procedures.

• “The banks don’t care about customers anymore and you can no longer make withdrawals at ATMs,” said a senior official at a private bank in Yangon, who declined to be named.
• “So, people have lost a lot of confidence in the banks. They mistrust the Central Bank, which controls the private banks.”

Businesses Suffer Amid Restrictions

Business owners say many cash-strapped businesses have been forced to shut down amid the junta’s restrictions on money flows. The Central Bank has not provided a timeline for lifting the withdrawal limits or addressing the banking crisis.

• “Money is the main commodity in our businesses,” said Myint Zaw, a businessman based in Sittwe. “If this product is no longer operating effectively, then things go very badly.”

Widespread Anxiety Among Citizens

The situation is causing widespread anxiety among ordinary citizens, with some speculating that if all deposits were to be withdrawn, the Central Bank and private banks would be unable to meet the challenge.

Conclusion

Myanmar’s banking sector is in crisis, leaving account holders fearful about the security of their savings. The junta’s exploitation of the financial system has led to widespread uncertainty and economic hardship. It remains to be seen how long this situation will continue and what measures will be taken to address it.