Myanmar banking: When there’s a coup there’s a way – to withdraw
Myanmar’s banking system has been on life support since the coup on February 1, with normal business grinding to a halt. But what’s replaced it feels like a slow-motion bank run that’s chaotic and corrupt.
Four months into a military coup, Myanmar’s banking system is slowly being strangled, thanks to tight restrictions on cash withdrawals, transfers and payments, leading to economic paralysis.
“It’s a slow-motion bank run. If the banks were fully open, they would’ve been emptied a long time ago,” says one financier.
For decades under military rule, the banking system was an antiquated mess. A fledgling democracy opened the door to financial reforms and limited foreign investment, but even before the coup on February 1, most banks were barely through the early stages of modernisation.
Since then the Tatmadaw, as Myanmar’s feared military is known, has brought in punishing policy-on-the-hoof measures aimed at avoiding a systemic meltdown, but which have smothered the financial system.
Under the Central Bank of Myanmar’s (CBM) mandated limits since the coup, banks have been forced to cap withdrawals at $120 a day for retail accounts. The limit is higher for business accounts, but as one businessman tells Asiamoney, “most have never bothered with these accounts, they are running their trading business through their personal accounts”.