30 January 2024

On 15 December 2023, the Central Bank of Myanmar (“CBM”) issued Directive No. 14/2023 (“Directive”) regarding the issuance of subordinated debts by licensed non-banking financial institutions (“NBFIs”). The Directive came into force on issuance.

The Directive provides that NBFIs must obtain CBM’s approval prior to issuing subordinated debt for financial funding. It lists the information that the NBFI must provide to CBM in order to obtain approval, which includes the description of the terms and conditions under which the debt is issued, the total amount of other debt both in Myanmar and abroad, as well as safeguarding measures to be implemented.

NBFIs must also comply with the terms and conditions set out in the Directive when issuing subordinated debt, which includes the following:

  • To issue the subordinated debt within one year of obtaining CBM approval.
  • The value of the debt to be issued shall not exceed 50% of the NBFI’s equity.
  • The original loan maturity of the debt shall be at least five years, and the debt should not be structured.
  • The debt shall not be redeemed or repaid at the initiative of the investor or lender earlier than the original loan maturity date which must be at least five years from the date of original issue.