Myanmar private banks have increased the interest rate to 9% per annum on fixed deposit accounts to attract new savers. Kanbawza Bank (KBZ), which has the most branches across the country, increased the interest rate to 9% p.a. for 90 days fixed deposit accounts and 9.25% per annum for 180 days fixed deposit accounts.
CB Bank also boosted the interest rate to 9.1% per annum for 100 days of fixed deposit savings. That promotion period is by the end of November. The minimum amount of 100 Days Fixed Deposit account is 10 million Kyats.
With the banks shutting off customers from withdrawing from their own accounts, during the whole of 2021, it would be wise to wait and see if the customers would bite onto this interest rate bait. This limiting of withdrawals have led to many losses (especially in terms of opportunity costs) and inconveniences for customers. MI has discovered some customers with significant balances are suing some of the banks for the loss in value arising from their inability to withdraw their own funds. The banks probably would have to do a lot more than just a 1% interest rate increase to build the confidence back.
The saving customers completely lost trust in commercial banks due to cash withdrawal restrictions and past problems, especially having to pay a % commission during these times to take their own money out.
