Vietnam to Restrict Investment in Bank Establishments

Vietnam will restrain investments by state-owned enterprises (SOEs) to form banks as SOEs allegedly invested into non-core business, the Government Office&rsquos Deputy Chairman Pham Viet Muon said at a press brief recently.

 

"The prime minister asked state-run economic groups and corporations to inform about their investments in banking and finance and securities sectors. Only after the government approves, they can invest," Muon said.

 

He said that the Vietnam Oil & Gas Group (PetroVietnam) is not permitted to hold stake in Petro Vietnam Bank (Hong Viet Bank) because it is now the founding shareholder in the Global Petroleum Commercial Joint Stock Bank (GP-Bank).

 

If PetroVietnam wants to found Hong Viet Bank, it must withdraw stake from GP Bank, he noted.

 

Vietnam Textile & Garment Group (Vinatex) Chairman Le Quoc An said "Vinatex has also planned to set up a new bank, but now it is not the proper time,"

 

Economic analysts expressed their worries over the establishment of too many banks. Huynh The Du, lecturer of the Fulbright Program said "it is impossible to ban establishment of new banks however, management bodies can set higher requirements to restrict establishment of new banks."

 

Vietnam now has total 93 domestic, foreign-invested and joint venture banks, 10 financial firms, 13 financial leasing firms and 998 peoples credit fund.

 

The State Bank of Vietnam has so far received 53 applications to form new banks, foreign bank branches and 100 per cent foreign-owned banks. (Young People)