Central Bank of Myanmar Regulations for Financial Institutions

မြန်မာနိုင်ငံတော်ဗဟိုဘဏ် ငွေရေးကြေးရေး အဖွဲ့အစည်းများနှင့် သက်ဆိုင်သော စည်းမျဉ်းများ

THE CENTRAL BANK OF MYANMAR REGULATIONS FOR FINANCIAL INSTITUTIONS

၁၃၅၄ ခုနှစ်၊ ကဆုန်လပြည့်ကျော် ၁၂ ရက် (28th May, 1992)

---

CONTENTS

Serial No.	Particular	Page
	CHAPTER I
1.	Title and Definition	1
	CHAPTER II
2.	Reserve Requirements	2
	CHAPTER III
3.	Interest Rates, Ratios and Exchange Rates	5
	CHAPTER IV
4.	Information and Returns	6
	CHAPTER V
5.	Clearing House	8
	CHAPTER VI
6.	Miscellaneous	13

---

The Central Bank of Myanmar Regulations for Financial Institutions

The Central Bank of Myanmar hereby issues the following Regulations under the authority conferred by section 102 sub-section (b) of the Central Bank of Myanmar Law.

CHAPTER I

Title and Definition

1. These Regulations shall be called the Central Bank of Myanmar Regulations for Financial Institutions.

2. The expressions contained in these Regulations shall have the same meanings as contained in the Central Bank of Myanmar Law and the following expressions shall have the meanings given hereunder:—

(a) Law means the Central Bank of Myanmar Law (The State Law and Order Restoration Council's Law No. 15/90);

(b) Rules means the Central Bank of Myanmar Rules issued by the Ministry of Planning and Finance under section 102 sub-section (a) of the Law;

(c) Member Bank means the member of the Clearing House.

CHAPTER II

Reserve Requirements

3. The minimum reserve required to be maintained by financial institutions under section 59 of the Law shall be 10 per cent of their demand deposits and 5 per cent of their time deposits. The Central Bank may, in accordance with the Law, change these percentages from time to time.

4. (a) In the required reserve to be maintained by banks and financial institutions in accordance with section 58 sub-section (a) of the Law, deposit with the Central Bank shall not be less than 75 per cent of the required reserve.

(b) Maximum 25 per cent of required reserve to be maintained by banks and financial institutions, in accordance with section 58 sub-section (a), may be maintained in the form of cash.

5. Changes in minimum reserve requirements under Regulation 3 of these Regulations, shall take effect only after 30 days' prior notice from the date of declaration of the changes to the banks and financial institutions by the Central Bank.

6. In the event of a deficiency in its reserves to be maintained, in accordance with Regulation 3 and Regulation 4 sub-regulation (a) of these Regulations, the deficient bank or financial institution shall pay one-fifth of one per centum per day on the shortfall to the Central Bank.

7. The financial institution which is subject to the penalty in accordance with Regulation 6 of these Regulations, shall correct its shortfall within 30 days.

8. A bank or a financial institution which is to pay a levy under Regulation 6 of these Regulations shall pay such levy within one calendar week after the end of the week in which the deficiency occurs.

9. Liquid assets contained in section 58 sub-section (b) of the Law includes the following:—

(a) Cash balances exceeding cash deposit to be maintained as required reserve deposited with the Central Bank;

(b) Cash holdings exceeding cash amount of reserve requirement;

(c) Call loans;

(d) Government securities;

(e) Bills of exchange and promissory notes maturing within 3 months.

10. Any financial institution which has a Savings Bank Department shall submit to the Central Bank a copy of the regulations governing that department and any changes, as and when made in such regulations. If such regulations restrict the amount that may be withdrawn by a depositor without notice, the Central Bank may determine, in the light of such regulations, the proportions of that institution's liabilities on account of its Savings Bank Department that shall be deemed to be demand liabilities and time liabilities respectively.

11. Financial institutions shall compute the amount of their required reserve on the basis of their deposit liability position at the beginning of each day and their reserve position at the end of each day. Computation shall be made weekly at the close of business on Friday or if Friday is a public holiday under the Negotiable Instruments Act, at the close of business on the preceding working day. Financial institutions shall, not later than the second business day following the last closing day submit to the Central Bank a report of their weekly position of required reserve to be held in accordance with section 58 of the Law and Regulation 3 of these Regulations in the form contained in Annexure A signed by two officers. Provided that the Central Bank may prescribe the appropriate date on which to file the weekly report of the financial institutions which have branches.

CHAPTER III

Interest Rates, Ratios and Exchange Rates

12. (a) Minimum interest rates payable in accordance with section 61 sub-section (a) of the Law, on savings deposit, savings certificate and time deposit shall not be less than 3 per cent below the Central Bank rate.

(b) Computation of interests shall be made on the basis of monthly minimum balance for savings deposit and yearly interest shall be computed on savings certificates and interest shall be computed on maturity of each time deposit.

13. (a) Maximum interest rate chargeable on loans, and overdrafts in accordance with section 61 sub-section (b) of the Law, shall not be more than 6 per cent above the Central Bank rate.

(b) The rest of the specifications contained in section 61 sub-section (b) of the Law and the applicable ratios contained in section 61 sub-section (c), shall be as the Central Bank may notify from time to time.

14. Spot selling rate and spot buying rate in foreign exchange transactions of the financial institutions and foreign exchange dealers, shall be at the rates ranging between 1/2 per cent above and 1/2 per cent below spot selling and buying rates specified by the Myanma Foreign Trade Bank for the time being. (These rates shall be prescribed by the Central Bank of Myanmar in due course.) The difference between such spot selling and spot buying rates shall not exceed 4 per cent.

CHAPTER IV

Information and Returns

15. (a) Financial institutions which open an account with the Central Bank shall, not later than the day on which such account is opened, submit the following to the Central Bank. Provided that financial institutions already in account with the Central Bank on the date of issuance of these Regulations need not submit them unless requested to do so by the Central Bank.

(i) a list of all their offices, branches and pay offices in the Union of Myanmar at which they are doing financial activities whether throughout the year or seasonally; and

(ii) a list of the names and official designations together with the specimen signatures of the officers who are authorized to sign on behalf of their financial institutions.

(b) The Central Bank shall be advised of any changes in the information submitted under Regulation 15 sub-regulation (a) clause (i) forthwith. No change shall be made with regard to the matter specified in Regulation 15 sub-regulation (a) clause (ii) without prior intimation to the Central Bank.

16. All financial institutions in the Union of Myanmar shall submit their weekly statement of position to the Central Bank, in the form in Annexure B, signed by their two officers who are authorized to sign on behalf of the reporting financial institutions.

17. All financial institutions in the Union of Myanmar shall, before the close of the month succeeding that to which they relate, submit to the Central Bank a statement in the form in Annexure C showing their assets and liabilities as of the last working day of each month.

18. All financial institutions not relating to provisions in section 72 of the Financial Institutions of Myanmar Law, shall submit to the Central Bank a copy of each of the statements to be submitted in accordance with the Myanmar Companies Act and the report of their annual general meeting of shareholders together with the accounts put before such meeting.

19. Financial institutions shall furnish to the Central Bank at such intervals and in such manner as may be prescribed, such information as the Central Bank may determine it requires for the effective discharge of its functions and responsibilities.

CHAPTER V

Clearing House

20. The Central Bank may, in accordance with section 74 of the Law, constitute a Clearing House for clearing the negotiable instruments among banks, with banks which apply for membership in the Clearing House. Provided that banks which are already members of the Clearing House on the date of issuance of these Regulations need not apply for the membership. The Central Bank shall grant membership to the banks after due consideration and notify in the official gazette the list of members of Clearing House and that of new members. Banks which are not members of the Clearing House may make clearing through a Member Bank.

21. A Member Bank who wish to resign shall give 14 days' prior notice in writing to the Central Bank. The Central Bank shall inform all other members of such resignation and notify it in the official gazette. On the date of expiry of the said notice the member resigning shall cease to be a member of the Clearing House.

22. A Member Bank shall cease to be a member if it stops or suspends payment of its debts generally or cease to carry on business or goes into liquidation.

23. Meetings of the Clearing House may be convened by the Central Bank or at the written request of two Member Banks. The Central Bank shall preside at such meetings.

24. Half or more than half of the Member Banks attending the meeting shall constitute a quorum. At the meetings of the Clearing House, decisions shall be adopted by the majority of the votes of the Member Banks present. In the event of an equality of votes, the decision shall be adopted by the casting vote of the Chairman of the meeting.

25. Decisions on matters relating to the Clearing House may be taken by circulation to Member Banks of the matter to be considered, at the discretion of the Central Bank, and shall be subject to the votes of half or more than half of the Member Banks.

26. Minutes of the proceedings of all meetings and decisions taken as a result of the proceedings by circulation shall be recorded in a minute book and signed by the Central Bank. The minute book shall be made available to Member Banks on request.

27. (a) The Central Bank shall supervise the clearing in the premises of the Central Bank but shall incur no responsibility whatsoever for the clearing apart from its own share therein.

(b) The representatives of each Member Bank attending the clearing shall bring clearing abstract signed by a bank official who is authorized to sign and clearing schedule together with negotiable instruments to be cleared. The representative of the Central Bank (Officer in charge of the Clearing House) shall verify the sum total of cheques described in the clearing abstract and clearing schedule and examine whether they are duly signed or not.

In order to carry out such clearing, the specimen signatures of the persons from the bank concerned, who are authorized to sign shall be sent to the Central Bank beforehand.

(c) On working days clearing shall normally be made at 12 noon. After completion of a clearing, Member Banks concerned shall be informed within 1:30 hours, for the unpaid and returned instruments. The Central Bank may extend the above time limit up to a half an hour on the day succeeding 3 or more holidays. Provided that due notice shall be given to Member Banks before extension of clearing time.

(d) On the working day at the end of the financial year, clearing shall be made twice in order to close the Annual Accounts. The time of the second clearing and return of the unpaid negotiable instruments shall be fixed by the Central Bank after making arrangement with the Member Banks.

(e) Every Member Bank shall, whether it has negotiable instrument to be cleared or not, attend the clearing without fail.

(f) A Member Bank shall, at the next clearing, submit to the Central Bank a notice of payment for debit jointly signed by two persons who are authorized to sign.

(g) A Member Bank shall send one or more skilled employees to the clearing.

(h) A Member Bank shall use the register in the form prescribed by the Central Bank.

(i) For the purpose of these Regulations, negotiable instruments include cheques, bills of exchange, banker's demand drafts, dividend warrants, payment orders, telegraphic transfer and mail transfer receipts and bills but not coupons and banker's fixed deposit receipts.

28. In connection with the unpaid and returned negotiable instruments the following shall be undertaken:—

(a) In case of non-payment of any negotiable instrument, such instrument shall be returned to the bank which has sent it within the period as may be fixed by the Member Banks and be exchanged for cash or a debit note by the Member Bank returning the instrument. If a debit note is returned, it shall be submitted at the next clearing.

(b) Every clearing shall be deemed to be provisional until all such debit notes have been thus discharged, provided no debit note shall be held beyond the clearing of the day following the delivery of such note. The said debit note may be drawn in the following form:— "The sum of K................................ is payable to .................................................................... at the next clearing on account of documents returned unpaid."

(c) Negotiable instruments returned unpaid must bear an objection slip.

29. (a) The Head of the related department of the Central Bank is authorized to exclude any representative of a Member Bank from the Clearing House for any reason.

(b) In the event of any Member Bank's representative being excluded for any reason from the Clearing House, such Member Bank shall accept the inward clearing from all other members present but the bank excluded shall make its own separate arrangements regarding its outward clearing.

30. All expenses connected with the Clearing House shall be borne in equal proportion by the clearing banks with the exception of the Central Bank.

CHAPTER VI

Miscellaneous

31. All financial institutions in the Union of Myanmar shall submit to the Central Bank a signed copy of the form in Annexure D in token of acceptance of provisions under these Regulations.

32. If a financial institution which has been permitted to engage in one type of business, wishes to extend its business classified under section 5 of the Financial Institutions of Myanmar Law, it shall apply for permission in form (CBM-01) prescribed in Rule 4 of the Central Bank Rules, together with payment of K 10,000 service charges.

(Vide Central Bank of Myanmar Board of Director's meeting No. 3/92, dated 28th May 1992.)

for Central Bank of Myanmar

(Sd.) TUN NAING Director Internal Audit and Bank Supervision Department

---

Annexure A Statement of Reserve Position

Name of Bank: ............................ Week Ending: ............................

	Demand Liabilities	Time Liabilities	Reserve Balance
	(at opening of business)		(at close of business)
Saturday	.................	.................	.................
Sunday	.................	.................	.................
Monday	.................	.................	.................
Tuesday	.................	.................	.................
Wednesday	.................	.................	.................
Thursday	.................	.................	.................
Friday	.................	.................	.................
Totals	.................	.................	.................
Daily Average Balances	.................	.................	.................
Daily Average Reserves Required	...(%)	...(%)	.................

Excess or Deficiency ................. Signatures .................

---

Annexure B (Name of Institution in print or block capitals)

Statement of position at the close of business on Friday the ........................................

	K
I. Demand Liabilities in Myanmar:	.................
(1) Deposits:	.................
(a) Deposits of banks	.................
(b) Other deposits	.................
(2) Liabilities other than deposits:	.................
(a) Liabilities to banks	.................
(b) Liabilities to others	.................
II. Time Liabilities in Myanmar:	.................
(1) Deposits:	.................
(a) Deposits of banks	.................
(b) Other deposits	.................
(2) Liabilities other than deposits:	.................
(a) Liabilities to banks	.................
(b) Liabilities to others	.................

---

	K
III. Cash in Myanmar:	.................
(a) Notes	.................
(b) Coins	.................
IV. Balances with banks:	.................
(1) With the Central Bank of Myanmar:	.................
(a) Head Office	.................
(b) Banks approved by the Central Bank of Myanmar	.................
(2) With other banks	.................
V. Money at call and Short Notices:	.................
VI. Advances in Myanmar:	.................
(a) To banks	.................
(b) Others	.................
VII. Bills purchased and discounted in Myanmar:	.................

---

	K
VIII. Investments in Myanmar:	.................
(a) Securities issued or guaranteed by the Union Government	.................
(b) Other investments	.................
IX. Savings Bank Account: (vide regulation 10)	.................
(a) Demand liabilities in Myanmar	.................
(b) Time liabilities in Myanmar	.................
TOTAL K	.................

Signatures of officers with designations.

Name of the Financial Institution ............................ Date ............................

---

Annexure C Monthly Statement of Assets and Liabilities of ........................................................ in respect of its business in Myanmar as at the close of business on ............................

LIABILITIES	K

1. Paid-up Capital | .................
2. Reserves | .................
3. Balance of Profit and Loss Account | .................
4. Deposits of customers other than banks: | ................. (a) Demand deposits | ................. (b) Fixed deposits | ................. (c) Savings deposits | ................. (d) Other deposits | .................
5. Balances held for banks: | ................. (a) In Myanmar | ................. (b) Outside Myanmar: | ................. (i) Head Office and branches | ................. (ii) Other banks | .................

---

	K
6. Amounts borrowed from banks:	.................
(a) In Myanmar	.................
(b) Outside Myanmar:	.................
(i) Head Office and branches	.................
(ii) Other banks	.................
7. Amounts borrowed from other creditors:	.................
(a) In Myanmar	.................
(b) Outside Myanmar	.................
8. Bills payable:	.................
(a) In Myanmar	.................
(b) Outside Myanmar	.................
9. All other liabilities:	.................
(a) Provision for taxation	.................
(b) Provision for bad and doubtful debts	.................
(c) Interest payable	.................
(d) Other liabilities in Myanmar	.................
(e) Other liabilities outside Myanmar	.................
TOTAL LIABILITIES	.................

---

TOTAL ASSETS	K

10. Cash in hand | .................
11. Foreign currency | .................
12. Balance with the Central Bank of Myanmar: | ................. (a) Minimum cash balance | ................. (b) Excess balance | .................
13. Money at Call: | ................. (a) In Myanmar | ................. (b) Outside Myanmar | .................
14. Balance with banks: | ................. (a) In Myanmar | ................. (b) Outside Myanmar: | ................. (i) Head Office and branches | ................. (ii) Other banks | .................
15. Treasury Bills of: | ................. (a) The Government of Myanmar | ................. (b) Other governments | .................
16. Other public securities of: | ................. (a) The Government of Myanmar | ................. (b) Other public authorities of Myanmar | ................. (c) Other governments | .................

---

	K
17. Other securities: (excluding Equity Investment)	.................
(a) In Myanmar	.................
(b) Outside Myanmar	.................
18. Equity Investment:	.................
(a) In Myanmar	.................
(b) Outside Myanmar	.................
19. Cheques purchased payable:	.................
(a) In Myanmar	.................
(b) Outside Myanmar	.................
20. Bills discounted or purchased	.................
21. Bills receivable	.................
22. Loans and advances to banks:	.................
(a) In Myanmar	.................
(b) Outside Myanmar:	.................
(i) Head Office and branches	.................
(ii) Other banks	.................

---

	K
23. Loans and advances to customers other than banks:	.................
(a) Overdrafts	.................
(b) Loans	.................
24. Fixed Assets:	.................
(a) Bank premises (land and buildings)	.................
(b) Other immovable properties	.................
(c) Other fixed assets (furniture, fixtures and fittings, etc)	.................
25. All other assets	.................
TOTAL ASSETS	.................

Signatures of officers with designations.

Station ............................ Date ............................

---

Annexure D Acceptance of Central Bank of Myanmar Regulations for Financial Institutions.

Date: ............................

This is to certify that the "........................................................" agrees to abide by the Central Bank of Myanmar Regulations for Financial Institutions.

Name ............................ Designation ............................ Name of the Financial Institution ............................ Seal of the Office