The CBM’s aim is to generate more growth and development in the local banking sector and create more opportunities for people to own homes.
Mortgages exceeding three years must be submitted to the CBM for approval on a case-by-case basis together with terms and conditions of the loan, the central bank stated.
The directive is intended for loans of longer than three year. In November 2017, the CBM ordered all banks to restructure existing overdrafts to term loans of not more than three years.
The CBM also announced on Tuesday that Myanmar banks have been permitted to extend loans without the need for collateral at a maximum lending rate of 16pc. The measures will take effect on February 1.
Banks will be permitted to charge up to 16pc to loan money if borrowers pledge other forms of collateral or are not able to provide collateral.
The Central Bank rate will remain unchanged at 10pc, while the maximum lending rate for loans based on CBM-specified collateral will remain at 13pc. The minimum deposit rate will also remain at 8pc.