缅甸联邦议会于2017 年11 月23 日通过新缅甸公司法（下称“新法”），并由总统于2017 年12 月6 日签署。蓝海法律专家、德信(缅甸) 律师事务所管理合伙⼈陈戍元律师等就新法对银⾏业（⽆论是外资银⾏分⾏、代表处、或本地缅资银⾏）的重⼤影响做了详细分析，继上一篇针对外资银行影响分析后，本期着重分析新法对本地银行的影响。
Banking and Finance could be one of the sectors to benefit the most from the new Myanmar Companies Law (2017) (MCL), passed by Parliament on November 2017 and approved by the President on 6 December 2017.
The new Myanmar Companies Law allows foreign investors to purchase up to thirty-five percent (35%) of a Myanmar company without the Myanmar company turning into a foreign company.This may seem like a technicality at first glance, but operating as a Myanmar'local'company will allow foreign investors to by-pass all limitations that a foreign company would be subject to.
Foreign banks to purchase Myanmar banks to acquire banking licenses
Currently there are thirteen(13) foreign banks with Foreign Bank Branch Licenses issued by the Central Bank of Myanmar(CBM), which give them the right to lend'onshore' to foreign companies. Any other foreign bank can only lend 'offshore'with the approval of CBM for every individual loan on a case一by-case basis.
The numerous foreign bank representative offices in Myanmar, which do not hold aForeign Bank Branch license, have been asking CBM,repeatedly, for the last few years, to award more licenses-decision which CBM has postponed.
The new Myanmar Companies Law could by pass the need for CBM Foreign Bank Branch Licenses. Foreign Banks could operate under the license of an acquired Myanmar bank.
A possible solution to this may be for foreign banks or other foreign investors to acquire up to the allowed thirty-five percent (35%) in an already existing Myanmar local bank, and hence 'purchase' the ability to operate as a full fledge Myanmar bank under a banking license previously granted by CBM to the Myanmar bank.
Purchase of small Myanmar banks could be an“acquisition nightmare“for foreign banks
Beyond the ability to legally operate in Myanmar as a fully icensed bank, there are numerous business and organizational issues surrounding the acquisition of small Myanmar banks.
There are twenty-four (24) private Myanmar banks listed on the CBM website, of which most but the top five would be considered 'sma banks.‘ Many of these banks lack the know-how of modern international banking and may be used to using antiquated technologies.
Lack of knowledge of moedern international banking practices,inability to adapt quickly,and cultural differences,could make it diffcult for foreign banks to work with acquired Myanmar banks.
The usual difficulties to any prospective merger and acquisition would apply to the acquisition of Myanmar banks by foreign banks, plus the work ethic and cultura,differences that may ensue.
CBM could restrict the purchase of local banks by foreign investors
The thirty-five percent (35%) foreign ownership allowance of Myanmar companies is applicable to all companies across all sectors.This would,
by definition，include Banking and Finance.
It remains to be seen how the Central of Myanmar may restrict the foreign ownership of Myanmar banks initially allowed by the Myanmar Companies Law
In the case of the Banking and Finance sector, the Central Bank of Myanmar (CBM) could easily release a notification at any moment prior to, or after, the commencement of the Myanmar Companies Law declaring limitations, or banning the ownership,by foreigners of Myanmar local banks with a previously issued CBM banking license.
FIL already grants CBM the right to regulate Mergers of Banks
The Financial Institutions Law (2016) (FIL), Sec. 48, grants CBM the right to regulate the mergers and acquisitions of banks in Myanmar. Under this section, no merger of a bank in Myanmar may take place without the prior approval of CBM.An application must be sent to CBM prior to the merger or acquisition of a bank.
More importantly on the face of the new Myanmar Companies Law, the Financial Institutions Law Sec. 50 clearly states that CBM has the right to release regulations specifying the allowed maximum percentage of shares that a bank may have over another bank.
Hence,CBM may had everything carefully planned all along from the drafting of the Financial Institutions Law, or even earlier. Reading the Financial Institutions Law Sec. 50 now in view of the new Myanmar Companies Law hints that CBM may be more likely than not to regulate further?
The future of foreign banking in Myanmar has an uncertain potential
CBM has taken measures to slow down the entry of international banks in larger numbers to buy time for smaller Myanmar banks to develop. However, only the top banks have used this precious time to truly develop their operations.Most of the small Myanmar banks have not taken advantage of this time, and have not developed nor modernized their operations.
It id clear by now that the small Myanmar banks will not progress by themselves.Acquistion by foreign banks is preferable to displacement by an inevitable everincreasing competition.
Such lack of development by the small Myanmar banks will make them appropriate, and troublesome, targets for acquisition by foreign banks.
However, it remains to be seen if CBM will“pull the trigger" under the Financial Institutions Law Sec. 50 and further restrict the allowance of thirty-five percent (35%) ownership by foreign banks of Myanmar banks, or just“let it be."
