The Central Bank of Myanmar announced on March 16 that it is revoking the banking license of locally incorporated Asia Yangon Bank Ltd (AYB) without giving any reason.
On March 22, The CBM explained the revocation of a local banking license for the first time in 15 years. CBM revoked license from AYB due to uncertainty over its source of capital funding. CBM deputy governors U Bo Bo Nge and U Soe Min explained that CBM first received a complaint about irregularities in the trading of AYB’s shares in 2017. At the same time, it was learnt that AYB did not meet its paid-up capital requirements.
In 2016, AYB proposed raising its paid-up capital. Under banking regulations, the CBM was required to investigate the source of the funds that would have been used for the exercise by AYB to determine its legality. The investigation determined that there was no evidence to show the legality of the funds that would have been used by AYB.
According to Myanmar’s Financial Institutions Law 2016, banks incorporated in Myanmar must have paid-up capital of not less than K20 billion and the funds for the capital must be shown to be legal and taxable. AYB was also the only local bank that did not meet the minimum requirements for its paid-up capital. With the guidance from the President’s Office and the Office of the Attorney General, the CBM took the decision to revoke AYB’s banking license.
“There will be no difficulty for depositors withdrawing money from AYB, as it has more than sufficient funds to meet the needs of customers,” said U Bo Bo Nge.
AYB Bank was established on 18 October 1994 and is headquartered in Botahtaung, Yangon. It has branches in Bayintnaung, Lewe, Mandalay, Taungoo, Monywa, Magwe, Pathein, Pyay, and Minbu.
Sources: The Myanmar Times
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