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Foreign banks must have at least VND1tril to set up in VN
06/08/2010 - 183 Lượt xem
Director of Banks and Non-bank Credit Institutions Kieu Huu Dung spoke with Lawrence Wolfe from Deutsche Bank, Alain Cany from HSBC, Dam Bich Thuy from ANZ Bank, Lai Minh Thuy from Citibank and Ashok Sud from Standard Chartered Bank.
How much capital must a 100% foreign owned bank have to operate in Vietnam?
They must have the minimum capital equivalent to VND1tril ($62.5mil). The capital level will be applied for domestic banks to be set up as well. It means that all banks operational in Vietnam will be equally treated.
Will there be any restrictions on the number of branches and transaction points?
There are no limitations on the number of branches and transactions points that every bank can have. However, the foreign banks will surely have to meet some requirements if they seek to expand their network. For example, the banks must not violate the law, and they must operate well and make a profit. In addition, they must keep close cooperation with the ‘higher levels’ in Vietnam.
Will foreign banks be able to provide the same banking services as domestic banks? For example, will they be able to receive deposits from the public in VND?
Whether the foreign banks can enjoy the full treatment provided by Vietnam’s government will depend on the WTO regulations to be applied when Vietnam joins the organisation at year end.
Vietnam may give full treatment to foreign banks by 2009 or 2010. I think it is too early now to talk about this. The issue will be left open until 2008.
How much capital must banks have to open new branches?
They have to add $1.5mil at least to the bank’s initial capital. Currently, SBV may consider allowing foreign banks to set up five branches even if they cannot meet the said requirements. SBV is also considering another solution, under which the 100% foreign owned banks will have the right to set up three to five branches in the first operation time, and then they will also have to meet the requirements applied to the domestic banks.
Can a foreign branch shift into an independent bank or a 100% foreign owned company?
Decree 22 seems to not allow doing this. However, the banks can still make the conversion if SBV revokes the licenses on setting branches and grants new licenses on setting up entities.
Regarding the time for conversion, SBV will give the answers after referring to WTO regulations. It will also need some more time to watch how the domestic banks can operate after Vietnam joins the WTO.
When will the circular on implementation of Decree 22 be released?
In the third quarter, or at the end of the year at the latest.
Source: TBKTVN 14/06/2006
