Roadmap for Local Banks to Raise Capital

The State Bank of Vietnam (SBV) is planning a roadmap to ask commercial banks to raise capital during Vietnam’s integration into the international economy, said Kieu Huu Dung, director of the SBV’s Department of Banks and Non-bank Credit Institutions.

 

To meet financial challenges, Vietnam needs to have strong banks, he said.

 

Meanwhile, most of the Vietnamese banks at present are only small scales with limited financial capacity.

 

Dung said that the SBV has mapped out a strategic development plan for the banking sector in next five years.

 

Accordingly, from 2006 to 2010, all commercial banks will be required to raise their minimum capital to VND200 billion (US$12.6 million) from the current VND70 billion in the first phase. The banks capital will then be lifted to VND500 billion and to VND1 trillion in the second and third phase.

 

According to the SBV, the country has five state-owned commercial banks, 37 joint stock banks, 28 foreign banks and five joint ventures. The biggest bank is the Bank for Agriculture and Rural Development of Vietnam (Agribank) with assets of VND162 trillion (US$10 billion).

 

The SBV official said that the commercial banks should be scaled up because they also have to expand operations, network, and banking services.