Central bank official submits resignation over Parliament remarks

U Soe Thein, deputy governor of the Central Bank of Myanmar (CBM), submitted his resignation on Tuesday after the CBM saw fit to publicly clarify comments he made about the banking sector in Parliament last week, according to unconfirmed comments by an MP from the Pyithu Hluttaw’s Banking and Financial Development Committee.

The MP added that the CBM has yet to accept U Soe Thein’s resignation, which follows comments made during a regular Pyithu Hluttaw session on August 27 in response to a question from lawmaker U Maung Myint from Minkin township.

Subsequently, the CBM issued an official announcement on state media clarifying U Soe Thein’s remarks in Parliament, precipitating the deputy governor’s resignation.

U Maung Myint raised questions about the CBM’s stance on businesses which have difficulty repaying their loans and whether the central bank has any solutions to ease the burden on small and medium enterprises after its meetings with business owners.

He also asked if the CBM plans to further categorise banks’ non-performing loans according to their nature, for example commercial loans or term loans.

In response, U Soe Thein said that there is a large amount of unpaid loans that have been rolled over indefinitely and that banks should follow regulations issued by the CBM in 2017 in dealing with outstanding loans.

He added that banks should be stricter when issuing new loans and raise efforts to collect debt from errant borrowers.

U Soe Thein said banks have a fiduciary duty to ensure that the financial system remains sound and secure by adhering to regulations and that this included ensuring that depositors do not lose their money.

He added that many borrowers have failed to repay their loans and some have owed the banks for years.

“This is going too far and the banks should collect what is owed them from loans issued.”

U Soe Thein said that it was the central bank’s duty to ensure that banking and financial regulations were adhered to and that its mandate included oversight on banks’ responsibilities for the deposits that they accept.

As the CBM has done what is necessary to help borrowers repay their debt, the central bank is no longer considering any lenient solutions when dealing with NPLs, he said.

But a week later, on September 2, the central bank announced that it would continue to work with borrowers to facilitate loan repayments and that the public has no cause for concern over the state of local banks. As the CBM is the lender of last resort, it will help and fully support the banks should the need arise. The statement, released on state media, was made to clarify U Soe Thein’s comments, which did not align fully with the CBM’s stance, it said.

According to data available at the end of June, over the past three years, total deposits at 31 local banks have risen to over K40 trillion, or around US$30 billion.

U Soe Thein was reelected as deputy governor of the CBM in 2017 and is well-regarded by the industry. “U Soe Thein has done good work since being reelected, including defining new financial regulations, rules on liberalisation and dealing with foreign banks and stabilising the exchange rate and inflation,” said U Aung Ko Ko, a member of Economic Committee of the National League for Democracy.

Attempts to contact CBM officials for comment were unsuccessful

Source: Myanmar Times

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