Trang Chủ
The government is speeding up negotiations in hopes of joining the WTO by the end of the year and is preparing to open its financial and banking sector to foreign competition, a central bank official told Dow Jones Newswires.
While the government has already approved the new law, associated regulations have yet to be worked out, the official said. US banks are also bound by a Vietnam-US trade agreement.
"Foreign banks will continue operate in accordance with their existing licenses, and they will have full access to the local market in the future, depending on bilateral or unilateral agreements between Vietnam and other countries or the WTO," said the official with the central bank's department of banking organizations.
Current law places restrictions on foreign banking corporations operating in Vietnam, such as limiting their access to Vietnamese dong deposits and requiring them to form local joint ventures instead of setting up 100% foreign-owned banks.
The new law allows foreign investors to set up a 100% foreign-owned bank, provided they have proven assets of $20 billion. Those in a joint venture bank need assets of $10 billion, the official said.
The establishment and operation of US-invested banks should also comply with the Bilateral Trade Agreement between Vietnam and the US, Kieu Huu Dung, a director of the central bank, was quoted by Vietnam News Agency as saying.
"US banks are permitted to set up their banks in Vietnam from 2010," Dung said.
Dung said foreign banks operating in Vietnam will also need registered capital of at least $63 million, which will soon be a requirement for all banks in Vietnam.
Currently, most foreign banks have registered capital between $15 million and $30 million, central bank figures show.
Vuong Quan Hoang, director of the investment advisory firm Emiscom, told Dow Jones Newswires that foreign investors who target Vietnam's retail market, which grew more than 20% last year, can enter the country by buying stakes in domestic banks.
Vietnamese regulations allow foreigners to buy up to 30% stakes in domestic banks.
The Australia & New Zealand Banking Group (ANZ), Standard Chartered PLC and HSBC Holding PLC have each bought 10% stakes in three Vietnamese banks - Sacombank, ACB and Techcombank, respectively.
Singapore's Oversea-Chinese Banking Corp. this week said it was buying a 10% stake in Vietnam's VP Bank.
So far foreign investors have set up 31 branches, four joint venture banks and nearly 50 representative offices in Vietnam.
By the end of September last year, foreign-invested banks had total registered capital of $536 million and total assets of $6 billion in Vietnam. They had a lending market share of 10%. Full-year comparative figures weren't available.
Source: Dow Jones Newswires
