Cash shortages push functional banking to brink in Arakan State

By Admin 03 Jun 2024

DMG Newsroom
3 June 2024, Sittwe

The regime has imposed limits on cash withdrawals from state-owned and private banks in towns it controls, according to residents. In Sittwe, Kyaukphyu, Taungup and Thandwe towns, only the state-owned Myanma Economic Bank is functionally operational, and private banks have ceased operations almost entirely.

In Thandwe Township, where military tensions are running high between the regime and the Arakkha Army (AA), residents can only withdraw 500,000 kyats per week, said a Thandwe resident.

“Banks are still operating in Thandwe. But you can’t withdraw as much as you want. Business owners and organisations have to use mobile banking systems to transfer money to agents and withdraw money from them,” he said.

As the fighting nears the town, residents who can afford to have fled to Yangon and Gwa Township. Many of those who remain in the town are low-income families.

In the Arakan State capital Sittwe, private banks have been largely closed since March due to lack of electricity, internet shutdowns and security concerns, said residents.

The state-owned Myanma Economic Bank is still operating in Sittwe, but few people use it, said a resident.

“Residents don’t use Myanma Economic Bank. The regime is only operating it to give salaries to its department employees, and for transactions between departments,” he said.

Banks are open in Taungup, but there is no money in circulation, and people have to rely on mobile money agents to withdraw cash, said a Taungup resident.

“We have to use mobile wallets like Wave Money and K-Pay to withdraw money from mobile money agents. Because of the cash shortage, the service fee has doubled or tripled,” he said.

Meanwhile, the banking system is down in towns seized by the AA including Pauktaw, Buthidaung, Rathedaung, Ponnagyun, Kyauktaw, Mrauk-U, Minbya, Myebon and Ramree.

The economy has been spiralling downward in Arakan State for months, with severe cash shortages hampering daily commerce, said business owners.