A coalition of junta offices arrested 40 people this month who were suspected of involvement in the hundi system of informal money transfer operations, according to a recent statement from the military council’s Central Bank of Myanmar.
The January 8 announcement said that the regime’s General Administration Department, the Bureau of Special Investigation and their financial investigation unit had questioned 99 people allegedly engaged in “suspicious” money transfer businesses. Twenty of these individuals are already being tried in township courts, and 20 more have been charged with crimes and are awaiting trial.
The statement did not reveal the identities of the accused, but it said that nine were involved in sending remittances from Myanmar migrant workers in Thailand, China, and Malaysia. Eight were reportedly exchanging US dollars for Myanmar kyat, and three were said to be transferring money for the purchase of goods.
The hundi system relies on agents who make international money transfers that bypass traditional central banking fees and regulations.
“Say you want to transfer money to Bago Region—we would have an agent there and when we tell the agent how much money to give to whom, the recipient can go and collect the money from the agent’s house,” a man who works as a hundi agent explained.
A Myanmar migrant worker in Singapore told Myanmar Now that he “tries to avoid transferring money through banks as much as possible,” preferring to use hundis, even though their services are not legal in either country.
While vowing to continue its crackdowns on hundis, the Central Bank also stated that the junta had granted official licences to 14 money transfer companies to officially recognise their services.
The hundi who spoke to Myanmar Now commented that the military’s suppression of the network is an effort to halt business from taking place outside of the junta-controlled financial system.
The military has limited the amounts of money that can be withdrawn from ATMs domestically, and shifted US dollar exchange rates to those favouring the regime, causing major losses to people with foreign currency accounts.
Because of this, people have opted to use hundi transfers to avoid exploitation by junta-controlled banks and exchange services, the agent noted, citing a “lack of management” by the military council.
“They have essentially said that they wouldn’t let the people cash out their own money, which drained any faith that the public had in them,” he said.
Last year, the military introduced a new policy requiring Myanmar migrant workers to show proof of paying taxes to the regime in order to renew their passports. They are also required to remit 25 percent of their salaries back to relatives in their home country through the junta’s banking system.