Banking activities are almost at a standstill in Myanmar in the face of a growing civil disobedience movement, endangering the country’s already fragile economy.
Bank employees joined medical staff, government officials and other workers to take time off work since February 1 stroke to protest the army’s overthrow of the elected government of Aung San Suu Kyi.
Most banks have been forced to close branches since the coup because they were understaffed for functions ranging from counting money to providing payroll services to businesses, men said. business at the Financial Times. Most lenders are trying to maintain ATMs and online services, but are struggling with understaffing and frequent internet shutdowns.
Monday, companies of all kinds closed across the country, as huge crowds gathered for a self-proclaimed “revolution” in the biggest protests since the military took power.
Businessmen and analysts have warned that the banks’ problems will become increasingly noticeable in the coming days as companies attempt to pay their monthly salaries to staff.
“Banking system shutdowns – making payments to thousands of businesses and making payments to over a million people nearly impossible – are more likely than anything else to end the political impasse.” said Thant Myint-U, a historian and author of several books on Myanmar.
The crisis is particularly acute in a cash-based society like Myanmar. The system was already in a shaky state in the years leading up to the country’s democratic transition coup, when banks were still embracing new technology and better lending practices after decades of economic isolation.
“Private banks are between a rock and a hard place,” said Vicky Bowman, director of the Myanmar Center for Responsible Business. “Every day they get calls from the state board of directors and the central bank, threatening to put them under administration if they don’t open their branches,” Bowman said, referring to the board. administration of the new junta. “But brands face damage to their brand on social media if we see them opening up.”
A senior banking official, who spoke to the Financial Times on condition of anonymity, said anyone who cited making comments encouraging a bank or other business to open risked being targeted as an enemy of the protest movement.
“Overall, I think it’s a bit of a tragedy since the protesters have a good heart, but their actions are somewhat misplaced,” the executive said. “At this rate, ordinary people – mostly street people – will suffer.”
Three lenders, UAB, Yoma Bank and KBZ Bank, joined other “affected companies” this week in signing a cautious text declaration declaring that they hoped for an early resolution of the crisis based on dialogue and reconciliation, “in accordance with the will and interests of the people of Myanmar”.
Growing problems in the banks will likely undermine Min Aung Hlaing’s junta in its promise to continue business as usual, made in the wake of the coup, which prompted the we, United Kingdom and Canada announce targeted sanctions against military leaders and their companies.
Two military-owned lenders, Myawaddy Bank and Innwa Bank – among the few to have reopened since the coup – have had to cap withdrawals. This could be, according to observers in Yangon, due to the threat of new sanctions imposed on companies controlled by the military.
Follow on Twitter: @JohnReedwrites