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Myanmar deposits hope in bank overhaul

Published on Jan 13, 2013 12:28 PM
An American tourist withdraws cash from an ATM machine using a MasterCard card, the first such ATM transaction, in Yangon on Nov 15, 2012. MasterCard Inc had announced in September that it had reached an agreement with a bank in Myanmar to issue its first branded cards in the country, which, emerging from isolation after years of military rule, has an antiquated banking system and a largely cash economy. -- PHOTO: REUTERS

YANGON (AFP) - As it strives to become Asia's next economic star, Myanmar has set its sights on overhauling its battered and distrusted banking system, a move which could pave the way for foreign lenders to open branches.

Legislation handing independence to the Central Bank of Myanmar is set to be scrutinised by lawmakers over the coming weeks, in the latest reform of an economy which was for decades shambolically mismanaged by the former junta.

The measure will be "a first step in a broader financial sector reform" geared at "strengthening and liberalising" Myanmar's enfeebled banking sector, according to Mr Rajiv Biswas, economist at research group IHS Global Insight.

It is also likely to prove complex, in a country where savings are often hoarded in gold and banks are viewed with deep suspicion after a number of scandals and currency collapses.

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