Central Bank of Myanmar plans first real-time payments system

The Central Bank of Myanmar (CBM) plans to introduce a real-time gross settlement (RTGS) system by the end of 2015.

Deputy governor Winston Set Aung says the country’s first ever RTGS will help to reduce the size of the cash economy, as the system will allow transfers between banks to be settled immediately.

An unnamed CBM official adds that RTGS will also support capital market development, making it easier and safer to trade stocks and bonds.

Last year, CBM worked with NTT Data to develop a new core banking system for the settlement of government bonds, funds and collateral management. The project was funded by the Japanese government, and was part of CBM’s plans to establish a fully modernised financial sector.

At that time, Asako Toyoda, senior manager for the Myanmar core banking project team at NTT Data, said: ‘The team suggested that the IT vendor that established the Bank of Japan’s BOJ Net [an RTGS system in Japan], which was NTT Data, should develop the CBM Net application too, and CBM agreed on it.’

In Myanmar’s move to modernisation, CBM has the backing of the Japan International Cooperation Agency (JICA) and the World Bank. CBM is also assisting local banks and foreign banks’ branch offices in preparation of the new system.

According to the Myanmar Times, only about 5-10% of Myanmar’s population has access to any form of banking services.

In addition to CBM’s work, the Yangon Stock Exchange, Myanmar’s first modern bourse, is set to open in the first week of December. At present, the government issues treasury bonds, but these are illiquid, and the nation has no corporate bond market yet.

Also, the Myanmar Payment Union (MPU) is upgrading its retail payment and settlement system, to help promote card payments. The organisation’s 21 member banks first offered debit card services in 2012 and introduced credit cards earlier this year.

Who is doing what in Myanmar’s banking technology space:

Last month, Ayeyarwady Bank (AYA Bank) launched an online bill payment service with Yangon City Development Committee (YCDC). Powered by ConnectN Pay the service enables YCDC’s customers to pay bills via AYA’s branches, internet and mobile banking.

While in March, Yoma Bank opted to partner with Misys, which will supply its Fusionbanking Essence core system. Yoma Bank is the first known customer for Misys in the country, and one of the first takers of the newly relaunched Fusionbanking Essence.

Back in 2013, Daiwa Institute of Research (DIR) and Torstone Technology, a start-up derivatives and securities software provider, built a front-to-back office solution for the securities industry in Myanmar. DIR, which has had a presence in the manually processed securities industry for the last 17 years, helped to build the infrastructure for a stock exchange in the country, together with CBM and Tokyo Stock Exchange.

Source: IBS intelligence

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