Yangon - Due to rumors after the news of the US sanction on U Aung Thaung, the saving withdrawal rose two folds at United Amara Bank (UAB Bank), according to the bank’s officials.
“Usually, the gaps between deposit and withdrawal average four to five billion Kyats. But it has reached ten billion today,” said U Than Win Swe, CEO of the bank.
According to him, on November 3rd, the withdrawal at the UAB Bank totaled 41 billion Kyats and the deposit was 44 billion Kyats. However, on November 4th after the news of the sanction came out, the withdrawal was 26 billion Kyats and the deposit declined to 16 billion Kyats.
Many customers rushed to have their savings withdrawn since they believed that UAB Bank was owned by U Aung Thaung. In fact, UAB Bank had no affiliation with U Aung Thaung and the bank was not sanctioned by the US government, U Than Win Swe said. According to him, U Nay Aung, who is a son of U Aung Thaung, owns 90 percent of the shares of the bank, but he is not involved in the management side of the bank.
“I can guarantee it. You can trust us,” said Than Win Swe.
U Win Thaw, director-general at Myanmar Central Bank also confirmed support to UAB Bank should the withdrawals go out of control.
“Central Bank has prepared cash in Yangon, Nay Pyi Taw, and Mandalay,” Win Thaw said.
Other banks such as Asia Green Development Bank and Kanbawza Bank had faced similar situations like UAB Bank, and Central Bank had enough cash to support UAB Bank, according to Win Thaw.
United Amara Bank is working with 71 foreign banks including 6 from the European Union to provide financial services. The bank has a total deposit of 440 billion Kyats and a total loan of 230 billion Kyats.
Banks have an important role in Myanmar’s economy. Since banks in Myanmar are relying heavily on each other, the collapse of a bank might have a domino effect on other banks. In some cases, if a bank runs into crisis, other banks will lend support such as giving loans and taking over the bank’s mortgage.