Myanmar junta restricts cash withdrawal at banks amid economic crisis

Withdrawals have increased as kyat loses value and economy tanks.
By RFA Burmese
2024.07.10
Myanmar junta restricts cash withdrawal at banks amid economic crisis People wait to withdraw money from a bank, July 10, 2024 in Yangon, Myanmar.
(RFA)

Amid steep inflation and a freefalling economy, Myanmar banks have begun restricting the amounts of cash that can be withdrawn each day, according to local residents, a bank branch, and a bank officer who told Radio Free Asia it was to prevent a bank run. 

“People have experienced more anxiety,” the bank officer said, referring to the country’s economic situation. 

“We have restricted the amount of daily withdrawal — as any bank does not have enough cash for massive withdrawal — to prevent the collapse of banks,” he said, speaking on the condition of anonymity for security reasons. 

Yangon residents who also asked to remain anonymous for security told RFA that restrictions began at the start of this week.

One resident said that while previously he was able to withdraw unlimited amounts of cash, all banks now limited customers to 1,000,000 kyat (about US$208) to 2,000,000 (US$416) per day.

“Although there is no problem with depositing, there are many difficulties in withdrawal,” he said. 

The limits come amid economic hardship for many in Myanmar, where the economy has shrunk 20% since the junta came to power in a 2021 coup and prices of consumer goods in some areas have risen 200%.

The kyat, meanwhile, has lost 28% of its value against the U.S. dollar over the past year, according to the latest World Bank report. The same report noted overall inflation was 30% year on year as of September 2023. 

In the hopes of stabilizing the domestic economy, the junta has repeatedly lowered the dollar exchange rate and tried to clamp down on capital flight. 

A factory owner in Yangon said his own bank branch, a KBZ located on Pyay road, had even lower limits of 500,000 kyat a day, making it hard for him to make payroll. 

"People are facing a hard time now,” he said. “The central bank is likely to be watching deposits and withdrawals.”

RFA contacted a branch of KBZ bank in Yangon, which confirmed they had restricted withdrawals. On Tuesday, they allowed a maximum withdrawal of 3,000,000 kyat, but on Wednesday reduced that by a third.  

The bank limits come on the heels of a July 1 announcement by the junta’s Ministry of Information saying it would charge executives and issue fines to seven private banks that issued mortgages exceeding limits imposed by the Central Bank. 

The banks include Yoma Bank, Myanmar Citizen Bank, AYA Bank, Small and Medium Enterprises Development Bank, UAB Bank, Myanmar Metro Bank and the Construction, Housing and Infrastructure Development Bank.

The bank officer told RFA he believed the warning of legal action had led citizens to assume that the government no longer trusted private banks, apart from KBZ, which has ties to the junta. That, in turn, had led to higher than usual withdrawals in recent days. 

Calls to Aung Kyaw Than, director general of the Currency Management Department of the Central Bank went unanswered. 

In June, the Central Bank announced it had taken legal actions against approximately 40 people who were involved in illegal digital currency trades and foreign money transfer businesses. 

Translated by Aung Naing. Edited by Abby Seiff and Malcolm Foster.

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