Banking legislation up to international standards
VietNamNet Bridge
Banking legislation up to international standards
4 October 2006
VietNamNet Bridge - (VNA) Banking legislation has been on par with international standards. That was the message from a conference on the effects of the Vietnam-US Bilateral Trade Agreement (BTA) on Vietnam’s economic development from 2001-05.
Since coming into effect, the bilateral agreement has affected all aspects of the national economy including the banking sector, said Steve Parker, director of Support for Trade Acceleration (STAR) project.
So far the BTA has been successful in spurring on needed changes to the nation’s banking-related policies, with regulations and amendments introduced to fall into line with international norms and other binding agreements.
With international financial institutions showing increased confidence in reforms of the finance industry, domestic banks have had to ramp up efforts to prepare for the expected fierce competition when wholly owned foreign banks are permitted to enter the country.
Currently the State Bank of Vietnam allows American and European banks to receive deposits in VND, however there is a maximum deposit threshold which allows for the combined number of company depositors to not exceed 600 percent of the bank’s chartered capital.
Although foreign banks have been relatively slow to enter the market over the last few years, this is expected to change quickly as Vietnam continues with the reforms that will see it equitise more state owned banks, increase banking technology and services and expand upon its operational networks.
The conference was organised by STAR in conjunction with Vietnam’s Central Institute of Economic Management.
