Get the basics right, bank boss tells Myanmar

Myanmar will need to get the basics right for its banking system in order for its businesses to make rapid progress, a top executive of a leading Thai bank told global business leaders last week at the World Economic Forum.

Teeranun Srihong, co-president of Kasikornbank, said the Myanmar banking system has to work on an efficienct payment system and then take steps to build public confidence to develop the deposit side of banking.

Teeranun was speaking as a panellist for "Moving from a Cash to a Banked Economy" at the Myanmar International Convention Centre. This WEF East Asia attracted a record 1,000-plus participants.

A robust banking industry is seen as critical to Myanmar's economic development. But the country remains a cash culture despite the continuing liberalisation of the economy, said Than Lwin, deputy chairman of Kanbawza Bank.

An informal survey of 500 vendors in main cities in Myanmar found few people are using basic banking services except for remittances to their relatives in other locations. This is partly the result of a lack of bank branches, lack of time and the feeling that filling out forms and providing data and information is a "far too cumbersome" process.

Furthermore and an aspect unique to Myanmar is people's trepidation in using banking services due to a host of historical reasons including the abrupt money cancellation promulgated by a previous government.

U Win Shein, minister of finance and revenue, said his assessment of the root cause is people's low income level as well as a general lack of knowledge about banking services. "People will want to keep money in safes rather than banks.

"Overall, we need to reduce poverty," he said.

Despite an opportunity to develop mobile and digital banking technology as a late economic development starter, Thailand's KBank chief Teeranun said that remains a pipe dream as "money in general doesn't exist in the banking system, nor does microcredit offer much help, as the system requires sophisticated risk management that doesn't exist now".

It would be best for Myanmar to develop basic banking infrastructure to enhance payment efficiency and attract deposits. Insurance is another product which could be deployed to boost confidence in the financial system as it would help protect depositors and give them financial security.

"(We've) got to get more people to use the banking system first," he stressed.

source: The Nation
http://www.nationmultimedia.com/business/Get-the-basics-right-bank-boss-tells-Myanmar-30207903.html