1 AIT Asian Institute of Technology

Banking sector development in Myanmar and its future prospect

AuthorZaw Moe
NoteA thesis submitted in partial fulfillment of the requirements for the degree of Professional Master in Banking and Finance, School of Management
PublisherAsian Institute of Technology
AbstractOn viewing Myanmar banking system, product range in Myanmar banking industry is not yet wide. There are few innovations in the products offered. The currency in circulation is the major portion of the money supply. The banking habit including information technology (IT) is not yet developed to an appreciable level, and the payment mechanisms are limited due to low utilization of chaques and lack of short term money market instruments and financial markets. In this research proposal, the main objective is to assess the Myanmar banking sector developments and to estimate banking sector’s future prospect especially domestic private commercial banks’ moving trends and developments. Development of banking sector relies on the significant reforms such as policy reform, institutional reform, legal reform and banking habit changes of old model banking. According to the economists’ researches, banking sector development is normally determined by increasing in money supply to Gross Domestic Product (M2/GDP) ratio, Private Credit/GDP Ratio, Reserve Requirement Ratio and Loan to Deposit ratio of the banks. Basically, this liquid money or the increasing of money supply to GDP (M2/GDP) ratio refers to the huge opportunities and a great future for continued growth. In Myanmar banking system, almost all of private commercial banks enlarge their credit particularly providing loans to both public and private sector that sometime increases inflation with fiscal deficit in financial system for developing countries. At the same time the responsible persons in state owned banks as well as private bankers need to bring about human resource developments to upgrade the banking system and to use modern IT technology as far as feasible. And then the high reserve requirement determined by central bank also is an obstacle for Myanmar banking sector development and financial intermediation. Because of its high condition the credit amount for overall sector has been reduced and as a consequence the investment projects and other industries depending on development and commercial loans have also decreased. To explain how to adjust a suitable loan and deposit limit and to measure the volume of banking sector development, the study of this paper points out by using the (M2/GDP)
Year2013
TypeThesis
SchoolSchool of Management (SOM)
DepartmentOther Field of Studies (No Department)
Academic Program/FoSMaster of Business Administration (MBA) (Publication code=SM)
Chairperson(s)Donyaprueth Krairit
Examination Committee(s)Winai Wansurawat;Badir, Yuosre
Scholarship Donor(s)Asian Institute of Technology


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