5:03:28 PM | 8/10/2008
A new bank must have chartered capital of at least VND3 trillion (US$187.5 million), including at least VND500 billion ownership of foundation shareholders, according to a draft on establishment of new banks being compiled by the State Bank of Vietnam (SBV).
The proposed regulations, set up based on WTO and OECD standards, will put stricter requirements on the establishment of new banks, said Le Xuan Nghia, head of the central bank’s Banking Development Strategy.
The draft decree will help stop the race to establish new banks which has been taking place for the past two years, causing uncertainties for the banking system.
The requirement of VD3 trillion is a very strict condition, because the current regulation allow banks to have chartered capital of only VND1 trillion by the end of this year, he said.
Foundation shareholders of new banks are required to have minimum VND500 billion, which is also very strict because many existing small-scale banks have such amount of capital.
Vietnam now has 50 banks with the capital of between VND500 billion and several thousand billion dong, including 30 joint stock banks.
Such number of banks is too many for the Vietnam’s US$70 billion GDP economy, economists said.
Nghia said that the most important thing for banks is effective operation, not scale or quantity. (Laborer)
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