We are well prepared to keep WTO commitments. Decree 22, stipulating the operation of foreign banks and the documents relating to this issue, was promulgated in June 2007.

Regarding the tardiness in licensing foreign banks, I think it is because of the technical problems on both sides. The foreign bankers did not submit the necessary documents as required by current laws, and they had to add more information, which resulted in delays.

We also have our problems. As you may know, the State Bank has not licensed any banks for quite a while. Therefore, we have been recently focused on checking the applications for setting up joint stock banks. With our current staff, it is very hard for us to manage the entire banking system. Moreover, we need to be quite cautious about licensing 100% foreign owned banks.

Regarding the cooperation between the State Bank of Vietnam and other countries’ central banks on supervising foreign banks in Vietnam, we have wrapped up negotiations and signed cooperation agreements with six countries, and we are going to complete negotiations with the other three soon. I hope cooperation agreements will be signed with 20 countries in the near future.

What are the requirements of 100% foreign owned banks?

The requirements on 100% foreign banks must be stricter than the requirements on foreign bank branches or local joint stock banks. For example, parent banks must have total assets of over $10bil. Besides, parent banks must not violate laws of their home countries.

We have received six applications for setting up 100% foreign owned banks, five of which have provided the necessary documents, but they still need some more work. Our department will submit the applications to the appraisal council, and they will then be submitted to the Governor for approval.

Is it true that the State Bank has been deliberately delaying licensing for fear that foreign bankers will dominate the credit market?

We have not delayed licensing on purpose because we understand the advantages of integration, as well as our WTO responsibilities. We have warned domestic banks about the challenges they will face when Vietnam opens the financial market, and they have been preparing for it.

Do you think that domestic banks are ready?

I believe that commercial banks have been preparing for global economic integration. Meanwhile, the central bank has been creating the best possible conditions for the banks to grow and compete by improving the legal framework and helping them improve management skills

Several years ago, many were concerned that Vietnamese enterprises would go bankrupt when Vietnam joined the WTO. However, it is now clear that enterprises will mature and Vietnamese products will become more competitive on the global market.

Source: TBKTVN.