Local Companies Race to Establish Finance Firms
Many domestic and foreign corporations are seeking to establish finance firms instead of banks like the tendency some months ago, the Nguoi Lao Dong (Laborer) newspaper said Friday.
Over the past three months, the State Bank of Vietnam, the country’s central bank has granted licenses for 16 finance firms, including 12 ones owned by Vietnamese groups and large corporations, and four foreign-invested ones.
Nearly 10 other applications are waiting for the central bank's approval.
At present, the procedures for setting up a financial company are much simpler than a bank.
A financial company is required to have a chartered capital of VND300 billion by late 2008 and VND500 billion by 2010.
Le Vu Nam, a lecturer at the Ho Chi Minh City National University, said the establishment of new financial companies will help boost competition in financial market and benefit customers.
However, he said that the domestic financial companies often serve their parent corporations and groups only and they will cause losses in human and financial resources.
But this will be a chance for foreign players, such as Prudential, SG, PPF and Toyota.
Tran Xuan Chau, Deputy Head of the central bank’s Banks and Credit Institutions Department, said it has to carefully consider in granting licenses to finance companies in order to ensure the efficiency and sustainability.
According to the amended decree on organization and operation of financial companies approved by the Government in July 2008, foreign institutions are required to have total assets of at least US$10 billion at the end of the year before asking for establishment application if they want to establish joint venture or 100 per cent foreign-owned financial companies in Vietnam. (Laborer)
Vietnamese
