BANK INSISTS MONEY IN SAFE HANDS: Yoma Bank staff count money at the bank’s central branch in Mingalar Taung Nyunt township, Yangon, on September 20. Yoma Bank last week slammed rumours it had lost its licence as “groundless” and insisted there was no danger the public would lose any money being held by the bank as it tried to avert a run on funds by concerned customers. Pic: Lwin Maung Maung

YOMA Bank on September 17 assured the public its funds were safe and the bank was in no danger of bankruptcy after rumours surfaced the previous week that it had fallen foul of authorities and was close to collapse .

“We categorically deny these rumours. They are groundless and untrue,” Yoma Bank chairman Serge Pun told The Myanmar Times.

“We don’t know whether these stories are aimed at destroying our bank or creating instability in the country,” he said.

Rumours began to circulate on September 12 that the government had revoked Yoma’s banking licence and it was subsequently unable to complete money transfers – currently the only banking service Yoma offers after it was prevented from holding deposits or providing loans in the wake of the country’s 2003 liquidity crisis.

Staff work at Yoma Bank's main branch in Mingalar Taung Nyunt township, Yangon, on September 20. Yoma Bank chairman Serge Pun last week dismissed rumours the bank had lost its licence as “groundless” and denied the public would have any difficulty collecting money from the bank. Pic: Lwin Maung Maung

A separate rumour suggested Yoma Bank was preparing to file for bankruptcy protection. Both were spread by word of mouth and rapidly made their way across the country, prompting a flood of inquiries from people afraid they could lose money being transferred by the bank.

“So far, there has been no one who has been unable to collect remittances.
“Our bank can issue all remitted money to customers at any time and people can withdraw the transferred amount within 10 minutes,” Serge Pun, also known as U Theim Wai, said on September 17 before leaving Yangon on an overseas trip.

Senior members of bank’s management refused to give any further updates on the situation later in the week.

U Maung Maung Win, deputy governor of the Central Bank of Myanmar, which is responsible for approving banking licences and imposing any restrictions on financial institutions, confirmed on September 17 there had been no change to Yoma Bank’s legal position.

“As far as the Central Bank is concerned, these rumours are groundless and totally wrong and create instability in the banking sector,” U Maung Maung Win said in a telephone interview.

“The bank (Yoma) is still operating as normal.”

Serge Pun, who is also chairman of First Myanmar Investment (FMI) Co., Ltd – a publicly traded company which holds a 35.6 percent stake in Yoma Bank and is involved in a wide range of business activities, including construction, healthcare, automotives and agriculture – declined to speculate on why or how the rumours were started.

However, he said while there had been no sudden drop off in the number of transactions Yoma Bank processed each day, the possibility existed for the rumours to do damage over the long term if they contributed to a loss of faith in Myanmar’s banking services.

“The rumours have a negative impact in the sense that they are not constructive. If we cannot overcome this critical situation, it could hurt our business,” Serge Pun said, declining to reveal how much money Yoma Bank handled at any given time.

“The success of Myanmar’s economic development is highly dependent on the success of the financial sector. Banking and business are closely related. Only when the banking sector is developed will other sectors of the economy be strong, and vice versa,” he added.

Yoma Bank was established in 1993 and employs about 1800 staff at 41 branches nationwide.