Cronistoria della crisi delle banche private
Burma’s Private Banking Crisis - a Chronology
December 06, 2003
By Irrawaddy

Feb 01, 2003—Burma’s Finance and Revenue Minister Khin Maung Thein is permitted to retire, but no further explanations are offered by the military regime.

In the first week of February, rumors of demonetizations of certain numbered currencies began to circulate in cities and towns.

Private service companies, which are independent investment houses, begin to look increasingly unstable as more than dozen have collapsed since late last year. Rumors that the major banks are also on the verge of collapse force depositors to rush to bank branches to withdraw their savings.

Living Color, a Rangoon-based Business magazine, runs a report in February alleging that Burma’s three largest private banks have been dispensing loans well beyond their capital. The article charges that Asia Wealth Bank has outstanding loans 50 times greater than its capital, while Yoma Bank has loans out 30 times greater than its reserves. Kanbawza Bank also reportedly has loans out totaling eight times more than its available reserves.

Feb 10—The governor of Burma’s Central Bank, the country’s primary monetary authority, holds a press conference in Rangoon in hopes of quelling consumer unrest. Kyaw Kyaw Maung guarantees that the 20 private banks have solid financial standing as well as the backing of the Central Bank. He urges investors to avoid private service companies, who do not have the support of the Central Bank, and ignore rumors and speculation regarding the private banks. Details from the press conference are carried in the state-run press, including the New Light of Myanmar.

After a huge run on the banks by depositors, banks begin denying withdrawal requests, and advise account holders to return after Feb 18.

Feb 12—Asia Wealth Bank, Burma’s largest financial institution, asks the Central Bank for a security bond of 30 billion kyat (US $30 million) to boost its dwindling reserves.

Feb 14—Editors in Rangoon say the junta has become extra sensitive concerning business reporting, and ordered the country’s Press Scrutiny Board to impose a news blackout on the crisis in an effort to ease public concerns.

Feb 15—Yoma Bank, one of Burma’s largest commercial banks, suspends its credit card services. Yoma Bank is one of only three banks in Burma to offer credit card services.

Feb 16—The state-run Kyemon newspaper says Secretary-One Gen Khin Nyunt blames dissidents in exile for the bank crisis. He says "destructive elements" have spread false rumors, which caused depositors to withdraw their money. He said the country would suffer losses because of the rumors.

Feb 17—Banks impose limits on withdrawals and ban account transfers. Individual customers are only allowed to withdraw 500,000 kyat (US $500) per week. Asia Wealth Bank suspends its credit card services, while Kanbawza Bank says it plans to issue a similar announcement.

Feb 18—As financial panic increases, crowds begin gathering in front of banks demanding withdrawals. Traffic police are called in to disperse huge crowds outside Asia Wealth Bank’s Olympic Tower branch in Rangoon, while security forces, including riot police, are beefed up to guard banks in both Rangoon and Mandalay after a bank in Rangoon’s Thingangyun suburb was stoned by angry account holders.

In addition, some businesses report that they do not have the cash to pay daily wages to staff, as significant withdrawals still remain restricted. Some banks tighten withdrawal limits further to 200,000 kyat.

Feb 19—Wint Kyaw, managing director of Universal Bank, tells The Irrawaddy: "I can’t say anything for now, because the situation is very perplexing."

Meanwhile, Asia Wealth Bank posts signs at their branches saying the bank is working under normal operating procedures, despite the maintaining of restrictions on withdrawals.

Feb 20—With a shortage of kyat in circulation, the currency strengthens against the dollar. Rates fall from 1,000 kyat at the end of last week to today’s black market rate of 900 kyat. Some banks drop the weekly limit on withdrawals even further to 100,000 kyat per account.

Several banks order investors with outstanding loans to repay between 20 and 25 percent of their debts within a few days.

Feb 21—The Central Bank pledges to assist private banks with a 25 billion kyat (US $25 million) bailout. The money is shared between Asia Wealth Bank, Kanbawza Bank and Yoma Bank. Other banks, including Universal Bank, drop the cap on withdrawals to just 50,000 kyat (US $50) per customer per week.

Gen Khin Nyunt addresses an annual meeting of the Ministry of Commerce and says Burma’s banks are safe. "For the people who have unnecessarily withdrawn money, there is no safer place for them to keep money than in the banks."

Feb 22—The Singapore-based Business Times reports that Singaporean companies are watching the crisis with concern and that one trading firm has already closed down operations in Rangoon.

Feb 23—Sr-Gen Than Shwe ostensibly cancels a trip to Kuala Lumpur for health reasons, where he was to attend the Non-Aligned Summit. Analysts, however, feel the cancellation is in response to the ongoing banking crisis at home. Foreign Minister Win Aung represents Burma at the summit.

Feb 24—The Myanmar Times carries a story quoting Gen Khin Nyunt’s address to the Ministry of Commerce. The weekly journal also quotes Brig-Gen David Abel, minister for the Office of the Chairman of the State Peace and Development Council, saying some banks had not operated within the boundaries of Burma’s finance laws and had loaned more money than was allowed. In the article, Zaw Win Naing, managing director of Kanbawza Bank, says: "The problem we face can be worked out soon, and it is a temporary problem."

Feb 25—A five-day fishery and livestock fair scheduled to start today is cancelled due to the banking crisis. Banks again call on customers with outstanding loans to repay their debt, and revise earlier demands for a 25 percent repayment to 50 percent.

Feb 26
—The SPDC officially orders banks to cease account transfers.

Feb 28—After the government bailout, some business account holders are permitted to make larger withdrawals to pay salary to staff, but most small accounts and personal investments are still restricted. Some traders also say that they have been unable to repay debts to other merchants, as their money remains tied up in the banks.

March 01—Traders along the Thai-Burma border in Thailand’s Tak Province are not affected by the ongoing crisis, the Bangkok Post reports. The Tak Chamber of Commerce says impacts would be minimal as importers and exporters on the border did not rely on Burmese banks.

March 02—The New Delhi-based Mizzima News Service reports that last week’s closure of the Burma Economic Bank in Tamu, Sagaing Division, close to the India-Burma border, has resulted in large losses for both Indian and Burmese traders. Indian exporters complain of pending dues from Burmese buyers. "The Burmese traders are also worried over the developments but they are prevented from protesting," the vice-president of the Indo-Myanmar Traders Union said.

March 04—Burma’s former Finance and Revenue Minister, Khin Maung Thein, whose retirement immediately preceded the run on banks, is reportedly being investigated by military intelligence for his connection to the crisis.

March 13
—A group of border traders from both India and Burma plan a meeting to discuss possible solutions to ongoing financial problems in the town of Tamu.

March 14—People in Rangoon begin selling luxury items, including automobiles, as investors are forced to repay loans. But with fewer people in a position to buy such items, the price of used cars, for example, drops by as much as 50 percent. Financial problems are also linked to an increase in the number of robberies.

March 18
—The scarcity of currency continues to strengthen the kyat. Moneychangers in Rangoon say the greenback is trading for as little as 850 kyat.

March 29
—A day before the first deadline for loan repayments, Gen Khin Nyunt holds a meeting in Rangoon. He says that condition for banks were improving, but customers still needed to repay outstanding loans. "I would like to urge those who have taken loans from the banks to strive to repay their debts speedily in consideration of those who have deposited money in the banks, and to ensure the long-term interest of the banks and to strengthen the national economy," Khin Nyunt said.

March 30—Time is up for the first lot of repayments on bank loans. An official from the Asia Wealth Bank said that at least 50 percent of loan debts were due today and warned that there would be reprisals, to be detailed on the weekend, for those who did not. Kanbawza Bank, meanwhile, called for 30 percent of debts to be repaid by today. All the banks have their own duties to report to the Finance and Revenue Ministry on the progress of the loan recall.

Nov 19, 2003—The US Treasury Department names two Burmese commercial banks, Myanmar Mayflower Bank and Asia Wealth Bank, to be of "primary money laundering concern" under Section 311 of the USA Patriot Act, enacted to fight terrorism. The Treasury’s report reads that the two banks have been linked to narcotics trafficking organizations in Southeast Asia and the military government failed to remedy serious deficiencies in its anti-money laundering system. It also announced plans to impose a ban on US financial institutions having correspondent accounts with Burmese banks, allowing exemptions in certain cases. Shortly after, an Asia Wealth Bank official denies the bank is laundering money.

Nov 21, 2003—Burma’s military government releases a statement denouncing US government sanctions against its banking industry, saying any financial sector problems were partly the fault of developed nations that failed to provide aid. The statement read, "The US government has been criticizing and condemning almost every institution in existence in Myanmar [Burma], and now is the time and the turn for Myanmar financial institutions to be accused of wrong doing."

Dec 4, 2003
—Burma’s Ministry of Home Affairs issues the Control of Money Laundering Rules to implement the provisions of the Control of Money Laundering Law that was enacted on June 17, 2002.

Dec 5, 2003—Burma’s military government sets up an investigation body, under Central Control Board of Ministry of Home Affairs, to determine whether money and property were obtained by illegal means by the Asia Wealth and Myanmar Mayflower banks.

It also launches an investigation into private banks Myanmar Mayflower and Asia Wealth to determine if they have links to drug trafficking organizations. Finance Minister Maj-Gen Hla Tun says the investigation would take three months and would be carried out under new regulations for controlling money laundering.