Private banks in Myanmar have begun to offer letters of credit (L/Cs) as the country takes its position in the global trading community after years of exclusion.

The L/C offerings from private banks authorised to handle foreign currencies should mean faster transactions from this month according to banking sources.

Authorised banks

Banks authorised to handle foreign currency accounts and provide L/Cs include Ayeyarwady, Asia Green Development, Co-operative, Myanmar Apex and Myanmar Oriental. Other banks are expected to acquire licenses.

The Co-operative Bank says it started to offer L/C services to customers on 1 August 2012 and that the new service is part of its commitment to extend its range of banking operations.

Service improvements

According to a senior official at the Co-operative Bank, its L/C services are no more expensive than those provided by the country's state-owned banks such as Myanmar Investment and Commercial Bank and Myanmar Foreign Trade Bank.

Meanwhile, he says private banks will have lighter procedures than state-owned banks and are considering how they can offer better deals than the state-owned banks.

One area they a looking at is collateral. While state-owned banks require collateral equivalent to the L/C value, the private banks are said to be looking to only a percentage of the L/C value to be put up as a deposit.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.