KBZ account freeze disrupts remittance services in Arakan State

By Admin 12 Jun 2026

DMG Newsroom

12 June 2026, Kyauktaw

The freezing of Kanbawza (KBZ) Bank accounts and KBZ Pay mobile wallet accounts has disrupted remittance services across Arakan State, raising concerns about worsening cash shortages in areas controlled by the Arakan Army (AA), local business operators said on Friday.

The account restrictions emerged following a scheduled system upgrade conducted by KBZ Bank on June 11, affecting users of KBZ Pay and the bank's digital banking platforms.

Local remittance agents said the restrictions appeared to mainly affect accounts handling large volumes of transactions, though KBZ Bank has not publicly explained the reasons behind the account freezes.

"The restrictions have primarily affected accounts with high daily transaction volumes," a remittance agent in Kyauktaw told DMG. "Only a few merchant accounts remain active. Based on what we have observed, many of the affected accounts belong to users in Chin State and Arakan State. Our business alone has more than K200 million frozen, while other agents have reported losses ranging from more than K100 million to several hundred million kyats."

Conventional banking services across much of Arakan State have remained limited since late 2023 due to armed conflict and transportation restrictions.

As a result, residents have increasingly relied on digital financial services such as KBZ Pay, Wave Pay and online banking platforms for commercial transactions and family remittances.

Residents and business owners warned that prolonged restrictions on digital financial services could worsen existing cash shortages.

"If these account freezes continue, remittance services will become even more expensive," a resident of Mrauk-U said. "Many families, especially internally displaced people, depend on money sent by relatives working abroad. Without access to mobile wallet services, it becomes difficult to receive cash."

In a public notice, KBZ Bank said its mBanking and iBanking services would be temporarily unavailable from 10 p.m. on June 11 until 1:30 a.m. on June 12 due to scheduled system maintenance.

Despite the announcement, merchants and residents in Arakan State said many accounts remained inaccessible as of Friday.

Business owners also expressed concern that the account restrictions could affect trade and supply chains by disrupting payments to suppliers and currency exchange transactions.

"Our business operations rely heavily on digital transfers," a merchant in Kyauktaw said. "If these merchant accounts remain frozen, it will affect cash flow, supplier payments and trade activities."

Community leaders said a prolonged disruption to digital financial services could further strain households already facing economic hardship.