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Robust banking facilities between India and Myanmar have failed to take off on the lines it was planned initially.
Although State Bank of India, United Bank of India and Bank of India have set up representative offices here, they have not committed any investment or shown any interest to set up branches here to boost trade and investment, a senior official told Business Standard.
Besides, the Export Import (Exim) Bank of India had been involved in implementing project exports here, coupled with disbursement of credit lines committed by India.
However, in the absence of proper banking and financial services, bilateral trade and investments have taken a hit. UBI was expected to open full-fledged banking services last year but has not done it yet.
According to the Indian authorities, the Myanmar government has not given the requisite permissions to set up banking facilities here. Myanmar says Indian banks have not shown any interest of serious interest to invest.
There were talks to float a joint venture state-owned bank with India and Myanmar sharing equity to strengthen banking and commerce ties but nothing has moved on that front as well.
India hopes that with greater economic reforms that are being undertaken by the Myanmarese government at present, this issue might soon get sorted out. This might become possible now as India and Myanmar share common banking laws, officials said.
Absence of proper banking branches has also resulted in the soaring of informal trade between the Northeastern states and China using Myanmar as the transit point.
V Seshadri, India's former ambassador to Myanmar and vice-chairman of New Delhi-based think tank Research and Information System for Developing Countries, says, "It is imperative to re-engineer trade through border and one of the ways could be by setting up efficient banking facilities."
