Mekong Monitor: Thai banks to recapitalise Lao branches to meet new Lao capital requirements
Photo credit: Bangkok Post
TRADE, ECONOMY, AND INVESTMENT
Thai banks to recapitalise Lao branches to meet new Lao capital requirements
(11 November 2019) Thailand’s Kasikornbank, Bangkok Bank and Siam Commercial Bank said this week that they will inject more funds into their branches in Laos in order to meet the Lao central bank’s amended capital regulations to meet minimum requirements. Under these regulations, foreign commercial banks are now required to have a minimum of US$5.8 million in registered capital, up from the previous US$3.4 million minimum. Foreign banks are permitted to increase their capital either on a one-time basis or in phases over the course of five years.
Thai cabinet urged to adopt development guidelines for EEC-Dawei link
(11 November 2019) Thailand’s National Economic and Social Development Council urged the country’s cabinet to adopt its guidelines on infrastructure development to help “set the tone” for large infrastructure projects such as the planned connectivity projects linking Thailand’s Eastern Economic Corridor with Myanmar’s Dawei Special Economic Zone (SEZ). Local players also urged the cabinet to expedite the development of an SEZ in a Kanchanaburi town bordering Myanmar and consider building a 2,200-kilometre road connecting Chiang Rai to southern Chumphon to facilitate logistics with Thailand’s Deep South and with neighbours such as Myanmar.
Thai bank launches blockchain funds transfer service for Thai and Lao businesses
(11 November 2019) Thailand’s fifth largest bank, the Bank of Ayudhya, which also goes by the brand name Krungsri, announced this week the introduction of what it says is the first real-time international funds transfer service between Thailand and Laos powered by blockchain technology. The funds transfer service will allow transactions in both US dollars and Thai baht. According to the bank, the Krungsri Blockchain Interledger will allow businesses from both countries to make cross-border fund transfers within seconds, up from the prior processing time of one to three business days.
Vietnam’s trade surplus widens to US$1.86 billion in October
(12 November 2019) Vietnam’s trade surplus widened from US$1.60 billion in September to US$1.86 billion in October, according to government data. The increase was due to a 3.7% month-on-month rise in exports in October to US$24.23 billion and a 2.91% month-on-month rise in imports to US$22.37 billion. All in all, Vietnam’s exports have grown 8.3% year-on-year to US$218.82 billion from January to October this year, while imports grew 7.7% year-on-year to US$209.81 billion during the same period, leading to a trade surplus of US$9.01 billion.
Myanmar to release new foreign bank licenses effective January 2021
(7 November 2019) The Central Bank of Myanmar announced recently that it will soon begin accepting Expressions of Interest (EOI) from foreign banks that wish to conduct a range of wholesale banking services with branch licenses or conduct both wholesale and onshore retail banking services with a subsidiary license. A branch license would require a minimum paid-in capital of US$75 million, while a subsidiary license would require US$100 million. The central bank also said that it may start approving foreign ownership in domestic banks above 35% starting in January 2020 on a case-by-case basis.
About Greater Mekong Subregion (GMS)
The Greater Mekong Subregion (GMS) Economic Programme was launched by the Asian Development Bank in 1992 connecting five developing ASEAN countries, namely Cambodia, Laos, Myanmar, Vietnam and Thailand, and Chinese provinces of Yunnan and Guangxi Zhuang Autonomous region. The region has some of the most robust economies sharing the Mekong River Basin thanks to its reform and liberalisation. The subregion is growing at a faster pace than the whole of East Asia and the Asia Pacific as the GDP growth rate for 2017 was at 6.4 percent, according to the World Bank. The population at the subregion as of 2016 is at 340 million while the GDP at PPP is at US$3.1 trillion in 2016. In 2015, trading within the region was at US$444 billion.