Vietnam’s central bank may allow in principle establishment for an additional five commercial joint stock banks by local leading companies early this year, the state-run Financial Investment newspaper reported Thursday.
“The State Bank of Vietnam is considering establishment of new banks, because the current banks are a few in terms of the number of banks over the country’s population,” a central bank official told the newspaper which is published by the Ministry of Finance.
In the booming economy after Vietnam joined the WTO early last year, establishments of new banks will help domestic companies raise funds for their expansions and boost the non-cash payment operations approved by the government of Vietnam, company officials said.
The five banks, which will have a registered capital of VND1 trillion (US$62.5 million) each, include the first proposed by Vinacomin, Song Da Construction Corp, Lilama, the second by Vietcombank, Thai Binh Footwear Co, Thien Duc Trade Co, the third by Vinachem, Techcombank, Tan Tao group, the fourth by Habubank, Mart Coop, and the last by Phuong Nam Co.
If these banks are approved, the total number of the new banks will be up to nine.
In December, Governor of SBV Nguyen Van Giau approved in principle establishment of four banks including FPT, Bao Viet, Lien Viet and Petro.
Ayumy Konishi, the ADB country director analyzed that these banks should operate independently with their groups, if not; there will be high risks for the entire banking sector.
Martin Rama, chief economist of the World Bank noted those local groups which expand their operations into the banking sector must be tightly supervised and controlled.
Currently, Vietnam has five state-run banks, more than 30 joint stock banks, four joint venture banks and roughly 30 branches of foreign banks operating. (Financial Investment, VNA)
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