Junta warns against large bank withdrawals amid financial uncertainty

Banks close their branches in areas seized by resistance forces, and the coup regime threatens to prosecute individuals attempting major cash withdrawals in other areas of the country

As Myanmar banks announce the closure of their branches in several towns that have recently come under the control of resistance forces, the military council threatens to take action against people who withdraw significant funds elsewhere.

Kanbawza (KBZ) Bank, one of the largest private financial institutions in the country, declared it would be shuttering its outlets in Karenni (Kayah) State, as well as in the northern Shan State towns of Hsipaw, Kutkai, Lashio, Muse, Namkham, and Nawnghkio, and in Kengtung in eastern Shan State.

Others, including more private banks and the state-owned Myanma Economic Bank, similarly announced they were halting operations in areas of intensified fighting. 

The junta said on Monday that individuals making large banking withdrawals would be flagged and scrutinised by the Bureau of Special Investigation, the Financial Intelligence Unit (FIU), and the regime-controlled Central Bank of Myanmar. 

Private banks are required to report withdrawals exceeding 100 million kyat (nearly US$47,750) to the FIU, and individuals attempting such transactions could be prosecuted, the Central Bank’s deputy governor Dr Lin Aung said in the announcement.

He did not specify which law would be used as the basis for prosecution. 

The deputy governor also warned the public of an increased risk of robbery or theft if they are found to be in possession of large sums of money. 

Lin Aung accused the media of inciting instability and insisted that people’s bank accounts remained safe in Myanmar.

Military council spokesperson Maj-Gen Zaw Min Tun said on Saturday that increased demands for bank withdrawals were due to fear-mongering rather than legitimate economic concerns. 

Lin Aung said that banks required time to prepare cash for such transactions, even though private banks previously advertised unlimited withdrawals from larger “special” accounts. 

“Banks have to keep cash, and depending on the size of their cash storage rooms, it is necessary to plan ahead. It would be convenient if you could inform the bank in advance of the amount you want to withdraw,” he explained. 

A woman working for a local company in Mandalay—who spoke to Myanmar Now on the condition of anonymity—said that transfers between banks were still possible, but that private banks had imposed limits on the amount of funds allowed. 

She said that her company had paid 2m kyat (around $950) to open a “special account” with the promise of unlimited withdrawals and transfers, but that the daily limit was now restricted to 3m kyat ($1,432).

“Regardless of what type of account it is, the bank will only allow daily withdrawals of up to 3m kyat,” she explained. “If you want to transfer 6m kyat, you will have to divide the amount between two recipients… you will need two people to receive the money.” 

The banking sector was one of many thrown into turmoil by the February 2021 coup, after which mistrust in the junta led to a surge in withdrawals, depleting cash reserves and prompting the implementation of severe restrictions on transactions. 

Coordinated with offensives launched in late October, ethnic armed organisations, People’s Defence Forces, and the publicly mandated National Unity Government (NUG) have seized state-owned and private bank branches in towns in which they have been able to drive out the military. 

The NUG announced on November 14 that their forces confiscated more than 900m kyat (nearly $430,000) from the Myanma Economic Bank in the district seat of Kawlin in Sagaing Region after resistance forces took control of the location. 

The funds, it said, would be managed by the NUG’s interim Central Bank.

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