Four people are confirmed dead and dozens more are feared to have drowned after an overloaded ferry sank on Myanmar's Chindwin River, local authorities said Sunday.

A total of 154 people have been rescued so far since the boat capsized early Saturday morning as it travelled from Homalin to the city of Monywa, northwest of Mandalay.

"Officially this kind of boat is meant to carry 150 people, with cargo," the director of the regional relief and resettlement department, Sa Willy Frient, told AFP.

"We do not know for certain the number of people on board as there is no exact record, but... the total may be around 240 or 250."

Many passengers were students from the local university or schoolteachers, as well as workers travelling home to celebrate the Thadingyut festival -- when devotees across Myanmar light paper lanterns and candles to celebrate Buddha's descent from heaven.

Four of the ferry's staff have been arrested and will face legal action. Authorities are still hunting for one crew member and the owner, said the relief department director.

Searchers Sunday were still trying to locate the capsized vessel and anxious families were waiting nearby for any news.

But those involved with the rescue effort hold out little chance of finding any of the missing alive over 36 hours after the ferry went down.

"I heard people crying out," said Aung Soe, a 37-year-old from a nearby village who tried to help save the passangers.

"People in the village were shouting out to help them and many people tried to save them. The boat sank very fast and I think the rest of the people were drowned in the river."

Boat accidents are common in Myanmar. Many living along the nation's long coastline and flood-prone river systems rely heavily on poorly maintained ferries for transport.

At least 21 people including nine children died in April after a boat capsized off the coast of Myanmar's Rakhine state.

In March last year 33 people lost their lives off the west coast when an overloaded ferry sank in rough waters.