26 February 2019

On 24 January 2019, the Central Bank of Myanmar (“CBM”) issued Directive No 3 of 2019 titled “Subordinated Debt Directive” (“Directive”). The Directive applies to all banks and states that a bank may include, after receiving CBM approval, subordinated debts in the supplementary capital or Tier 2 capital up to a maximum of 50% of Tier 1 capital provided the subordinated debt meets the eligibility criteria set out in the Directive. A bank must issue the subordinated debt within one year of obtaining CBM approval.

The Directive states that a bank must provide certain information such as a description of the terms of the issuance of the debt and a copy of the final debt note and agreement in order to obtain CBM approval. The Directive also sets out criteria which all subordinated debt must meet, such as the debt has been issued and fully paid up, the debt is not issued directly or indirectly to the general public, and the debt is subordinate to depositors and to the general creditors of the bank by claim.


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