Myanmar Universal Bank Taken Over

The state-run Myanma Economic Bank on Monday took over operations of the privately-owned Myanmar Universal Bank, though no public reason was offered.

Sein Win, manager for the head branch of the Myanmar Universal Bank, confirmed the takeover but declined to say whether the bank has been liquidated or not. As of Monday, there was no public announcement of whether MUB’s banking license had been revoked.

“From today onwards, operations of the bank will be taken over by the Myanma Economic Bank. Depositors can draw 30 lakhs each week,” Sein Win told nervous customers who arrived early Monday to withdraw their savings. Thirty lakhs is 3 million kyats, worth approximately US $3000 (€ 2,325) at the black market exchange rate.

News that the government sealed the bank premises began circulating on Saturday, and about half a dozen police were stationed outside each MUB branch when they opened Monday.

Soldiers raided the house of a major shareholder of the bank on Friday, taking him away and confiscating his cars, said neighbors and colleagues. Major security operations in Burma are normally carried out by the military rather than the police.

There was speculation in business circles that the arrest and the bank’s closure could be related to allegations of money laundering, since the action came soon after the signing of an agreement between Burma and Thailand for the exchange of financial intelligence related to money laundering.

In March this year, the government closed two major banks, the Asia Wealth Bank and the May Fower Bank, for violating banking laws. The two banks had earlier been accused by the US of money laundering and links to drug traffickers.

Burma’s banking sector has been on shaky ground since February 2003, when rumors of insolvency among some of them triggered a run, which forced the military government to intervene with assistance and impose temporary limits on currency transactions.

Only 100 customers at each MUB branch were allowed to make withdrawals on Monday, with others told to return later in the week, and crowds cleared from waiting near the bank.

August 8 is an unusually sensitive day in the authorities’ eyes, because it marks the anniversary of a 1988 mass pro-democracy uprising which was violently suppressed by the military, and the government fears activists marking the occasion.