Cash Shortage in Arakan Drives Up Transfer and Withdrawal Fees, Leaving Locals Struggling with Daily Expenses

News ၊ September 24, 2026

Photo - ABN

Decreasing cash circulation and severe difficulties in obtaining physical currency in Arakan have driven up remittance and cash withdrawal fees, leaving local residents facing significant hardships in managing their daily living costs, according to local sources.

Currently, obtaining physical cash in Arakan has become extremely difficult. Furthermore, withdrawing money sent from overseas or other regions as hard currency incurs increasingly high withdrawal service charges.

Locals report that transportation barriers, military conflicts, and logistical challenges have made moving cash between townships nearly impossible, directly impacting the region's overall currency flow.

Rising withdrawal fees particularly burden families who rely on remittances sent by children or relatives working abroad, as paying extra service fees out of their received funds places a heavy strain on their daily budgets.

Lha Khine Saw, a money transfer and withdrawal service operator in Maungdaw, noted that due to erratic cash supplies, service fees fluctuate based on where cash is sourced and the total withdrawal amount.

Locals emphasize that these withdrawal hurdles prevent families receiving foreign remittances from fully utilizing the sent funds, as an increasing portion is lost to service charges.

Alongside the overall cash scarcity, local residents face significant challenges using worn or torn banknotes currently circulating in Arakan.

Many shops refuse to accept badly worn or torn bills, leaving residents unable to purchase essential commodities immediately despite having cash in hand.

For individuals reliant on daily earnings to feed their families, being unable to spend a banknote at its full face value directly cripples their daily living requirements.

When cash is urgently needed for basic necessities like rice, oil, salt, food, and medicine, shop rejections force residents to exchange damaged bills at a lower rate or spend time searching for alternatives, resulting in devaluation.

Maung Ko Naing, a resident of Buthidaung Town, noted that while some traders exchange damaged banknotes, they do so at a fraction of their value.

Locals stress that this crisis involves not just a shortage of physical bills, but the inability to spend existing cash at full face value.

Additionally, access restrictions placed on certain KPay and KBZ bank accounts have further crippled remittance and cash withdrawal services across Arakan, according to residents and financial service providers.

Following system upgrades by KBZ Bank on June 11, 2026, some KPay and KBZ digital banking accounts were restricted, causing severe disruptions to local remittance networks.

Because agents rely on KPay and bank accounts to facilitate transfers and disburse physical cash, account suspensions have introduced critical bottlenecks into local financial channels.

Consequently, even when funds are successfully remitted from abroad, the inability to cash them out locally threatens households' immediate access to food, education, medical care, and basic necessities.

Local business owners emphasize that cash circulation in Arakan is deeply intertwined with transportation routes and logistics; any restriction on moving currency directly paralyzes local market liquidity.

Addressing the current crisis requires restoring regular cash supply lines, streamlining money transfer services, and resolving technical restrictions on digital banking platforms.

Furthermore, residents emphasize the need for clear, accessible mechanisms to exchange worn and damaged banknotes at full value.

Ultimately, local populations are confronting a compound financial crisis—one involving cash availability, transfer accessibility, withdrawal feasibility, and the full purchasing power of their currency.

As long as currency circulation remains disrupted, local residents reliant on foreign remittances and cash-based daily spending will continue to face daunting socio-economic challenges.

Source@ABN