page_title: 2003 Myanmar banking crisis
section_title: Timeline
hierarchical_section_title: 2003 Myanmar banking crisis / Timeline
caption_attribution_description: English: Central Bank of Myanmar sealမြန်မာဘာသာ: မြန်မာနိုင်ငံတော်ဗဟိုဘဏ် တံဆိပ်
context_page_description: The 2003 banking crisis of Myanmar was a major bank run in private banking that hit Myanmar in February 2003. It started with a decline in the trust for private financial institutions following the collapse of small financial enterprises and proliferating rumors about the liquidity of major private banks. Leading to a bank run on the Asia Wealth Bank, the crisis quickly spread to all major private banks in the country. It led to severe liquidity problems for private banks and scarcity of the kyat. Though exact data is not available, it is believed that the crisis caused major economic hardship for many in Myanmar.
context_section_description: On February 6, fears about the private banks collapsing led to bank runs by customers to withdraw their funds. Starting with Asia Wealth Bank, the runs quickly spread to other private banks. As early as February 10, the situation got dire enough that Kyaw Kyaw Maung, the governor of Myanmar's Central Bank, held a press conference assuring that all 20 banks are in firm financial standing and have the backing of the Central Bank. However, this attempt was not enough to quell the consumer unrest. Different banks started to begin denying withdrawal requests and asked account holders to return after February 18. By February 12, reserves of Asia Wealth Bank dwindled to a point where the bank asked the Central Bank a security bond of 30 billion kyats (US$30 million.) Finally, on 15 February, Yoma Bank, one of the three banks in the country that have credit card services, suspended such services in the face of the crises. 
  With the financial situation getting worse, there were reports that the ruling party got increasingly sensitive about business reporting in the country, imposing a news blackout in an effort to stop the spread of panic among the public. The state-owned Kyemon newspaper ran a story that blamed the destructive elements abroad, such as the exiles, for the banking crises.
  
  By February 17, all private banks started to impose a withdrawal limit of 500,000 kyat ($500) per customer per week in order to tackle the liquidity problem. Within a week, this limit got further tightened to 200,000 and 100,00 kyat for some banks. Universal Bank decreased this limit to 50,000 kyat per week by February 21. In response to the limits, large crowds began gathering in front banks demanding withdrawals. After a bank in Yangon's Thingangyun area was stoned by account holders, riot police was called upon to guard banks, while the traffic police tried to disperse the huge crowds outside of the Olympic Tower branch of Asia Wealth Bank. Soon, Asia Wealth Bank posted signs saying their branches are working in normal conditions, even though the restrictions were still in place. 
  On February 20, several banks ordered their investors to repay about 20% to 25% of their loans to the bank within a few days. By some accounts, this was asked by the Central Bank of Myanmar. This led to further hardship for customers, where, in one geographic division, people who borrowed for purchasing homes were asked to return 25% of their loans back. Though there is no exact data on what followed, there is contemporary reporting that suggests people had to "sell assets or downgrade their business and lifestyles” in order to meet these loan calls. By February 25, some banks revised their earlier demands for 25% of the outstanding loans repayments to 50%. The Central Bank of Myanmar’s timetable initially required that all required repayments were to be paid by the end of March 2003. General Khin Nyunt, on March 29 said in a press conference that he “would like to urge those who have taken loans from the banks to strive to repay their debts speedily in consideration of those who have deposited money in the banks, and to ensure the long term interest of the banks and strengthen the national economy". However, the deadline later got pushed back to May 2003 as a lot of the recalled debt was not paid back. Even by the end of May, there were still repayment orders that were not fulfilled.
  On February 21, the Central Bank pledged to assist private banks with a 25 billion kyat ($25 million) bailout, at 4% interest rate. The money was going to be shared between the three largest private banks: Asia Wealth Bank, Kanbawza Bank and Yoma Bank. This liquidity support represented about 3.5% of all deposits in these banks. However, according to the Irrawaddy Newspaper, this money have never actually arrived to these banks.
  Though the reports on the crises have been limited outside of the country due to the media blackout, by the end of February, a Singapore-based business magazine wrote that they are watching the crises with concern and one firm has already closed down operations
caption: Central Bank of Myanmar seal
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