In the first half of 2005, despite fierce competition in mobilising capital in the financial and monetary market, credit organisations, and members of the Vietnam Banking Association (VNBA) made great efforts to mobilise capital and provide loans, meeting the demand of the economy. So said Nguyen Trong Nghia, general secretary of VNBA at the second annual meeting of the General Assembly of VNBA, which was recently held in Hanoi.
By June 30, 2005, capital mobilised by credit organisations had increased by 9.07 per cent in comparison with late 2004. Total loans had seen an increase of 10.63 per cent. Most VNBA member banks had increased their charter capital. Accordingly, total charter capital of State-owned commercial banks had reached VND 18,415 billion, up by two per cent against the first quarter of 2005. This figure was put at VND 6,720 billion for commercial joint stock banks, up by 13.7 per cent; and VND 615 billion for VNBA member financial companies, up by eight per cent.
VNBA member credit organisations are making efforts to modernise banking activities, build an electronic payment network and develop more hi-tech-based convenient products, including smart card, homebanking and Internet banking services.
At the meeting, 43 members of VNBA submitted a proposal to the State Bank of Vietnam on the issuance of a co-operation mechanism between authorised agencies to settle sudden risks of credit organisations.
Banks said that the State Bank of Vietnam should have a regulation on a co-operation mechanism for settling sudden risks (ie, groundless rumours causing a massive withdrawal of deposits and savings at the Asia Commercial Joint stock Bank last year and the Phuong Nam Commercial Joint stock Bank recently). The State Bank of Vietnam should issue mechanisms, so that banks will be able co-operate authorised agencies and localities to disseminate and explain when risks, which may threat monetary security of banks, occur.
Le Van So, general director of the Vietnam Bank for Agriculture and Rural Development and president of VNBA, said that deposit insurance services were further needed to protect banks from risks. The services, apart from paying depositors when banks go bankrupt, should have a mechanism of providing support for banks when they face sudden risks.
Banks themselves should promote customers’ information, maintaining regular reports to the State Bank of Vietnam, VNBA and relevant agencies, so immediate support measures can be taken when sudden risks occur. They should fully observe the approaches of VNBA in maintaining and stabilising their operation, and promoting co-operation in developing modern banking technology, helping each other overcome difficulties when any sudden risk occurs.
Lan Anh
Vietnamese
