A draft of the Bank and Financial Institutions of Myanmar Law currently before the national assembly contains language that could have all businesses that lend and lease equipment classified as non-bank financial institutions (NBFI), subjecting them to greater oversight, law and tax advisory firm VDB Loi said.
This could have major implications for companies that rent vehicles and construction equipment, subjecting them to oversight by the Central Bank of Myanmar (CBM).
A report released by VDB Loi questioned the intentions of the legislators, stating, “It is unclear what regulation the CBM has in mind for such companies. The draft law merely states for all non-bank financial institutions that the CBM may impose such conditions as it sees fit.”
In a presentation to clients and media, Edwin Vanderbruggen, partner at VDB Loi, said that the intentions and ramifications of this upcoming law were unclear, and if passed, it is uncertain how many NBFI licences would be awarded, and companies would be well-advised to apply early for licences.
The upcoming Bank and Financial Institutions of Myanmar Law should not be confused with the The Financial Institutions of Myanmar Law passed in 1990.