Shwe Rural and Urban Development Bank opened its head office in Yangon yesterday. The lender plans to set up 25 branches over the next five years, but will conduct most of its operations through a network of countryside-based agents.
The privately owned bank – headquartered on the corner of Pansodan Road and Merchant Street – received a banking licence in July 2014. It then registered as a member of the Myanmar Payment Union MPU in January 2015, but was in no rush to formally open its doors.
“We took time preparing [our bank] to keep up with ASEAN banking standards, and to take part in the [ASEAN] economic community which will form in the next few years,” said U Thein Zaw, deputy chair of Shwe Bank and a former deputy director general of the Central Bank.
The 10-member ASEAN officially launched its economic bloc at the end of last year, although analysts believe it will take years for true economic integration to take place.
Shwe Bank plans to offer a mobile banking cash transfer system between rural and urban areas. It is currently in discussions with state-owned telecoms operator MPT about offering a joint service. Opening hundreds of branches through the countryside would be logistically difficult, and so the bank will instead operate through a network of agents, U Thein Zaw said.
People living in rural areas will be able to receive payment authorisation over their phones, and collect the cash from their local agent.
“The volume of people using internet and mobile phone banking has increased significantly,” he said. “We’ve built a data centre to manage mobile banking, to help further financial inclusion, which includes helping people in rural areas participate in the banking system.”
Shwe Bank plans to employ around 326 agents across the country within the next five years. Over the same period it hopes to open five branches a year, but will prioritise states and regions other than Yangon, given its rural focus.
The bank will also offer typical banking products like deposit accounts and loans, and has a licence to trade foreign exchange.
At the end of the fiscal year ending in 2017, Shwe Bank plans to set up a reserve fund from which it will provide low-interest loans to people in rural areas. The bank could not comment on what the interest rates on these loans will be.
Under Central Bank regulation, banks can charge a maximum interest rate of 13 percent on loans – which most do. The exceptions include policy banks, such the Small and Medium Industrial Development Bank, which lends to businesses at around 8%.
Shwe Bank is 100pc privately owned, and was founded by local conglomerate Shwe Than Lwin, which is also the largest shareholder. The bank has 10 other private shareholders. According to Central Bank regulations, Shwe Bank invested K20 billion in paid-up capital and has authorised capital of K100 billion.
Source: Myanmar Times
