Just a month after DBS opened its representative office in Yangon, the firm completed its first Myanmar letter of credit (L/C) transaction, while at the same time launching the DBS Myanmar Trade Solution, which helps with the remittance of funds into Myanmar for the purpose of investments.
Banks issue L/Cs (guarantees of payment) as a means to promise sellers that they will receive payment as long as they comply with all previously agreed-upon arrangements.
The completion of the first Myanmar L/C transaction demonstrates the large potential for economic growth within the nation, which has been steadily implementing numerous market reforms.
According to Asia Development Bank, Myanmar’s GDP growth rate will likely top 6 percent this year, and may sustain and expand this growth to 7 or 8 percent per year over the next 10 years.
DBS opened its representative office in Yangon’s downtown business district on November 15, largely to boost its banking presence in the potentially lucrative Myanmar market.
DBS Taiwan has recently launched the Myanmar Trade Solution, a new suite of Taiwan-Myanmar transaction services.
Sean Chen, head of Global Transaction Services at DBS Bank Taiwan, stated that this particular DBS Myanmar Trade Solution is a complete suite of services specifically designed for Taiwan’s import and export companies to develop their business interests in the Myanmar market.
Chen stressed that with DBS Bank Taiwan's financial services, customers no longer have to fly overseas to remit capital in and out of Myanmar; instead they can carry out complete transactions in Taiwan through a safe and legal channel.
“Customers no longer have to worry about losing their capital, not to mention they would be paying a more reasonable service fee,” Chen said.
Moreover, through a special arrangement between Myanmar banks and DBS Bank Taiwan stipulated in the L/C, the shortest time for exporters to convert their receivables to cash is five working days after export documents are delivered to the L/C-issuing bank, Chen said.