Ha Noi (VNA) – Representatives from foreign institutions have recognised that the Vietnamese Government is moving to implement its commitments to the World Trade Organisation (WTO) in the banking sector, but is still slow in licensing 100 percent foreign-owned banks
“As for the commitment under the WTO to allow for 100 percent foreign banks, the Vietnamese government has already drafted Decree 22 and has in part complied to it with a proper roadmap to get in there,” Citigroup Managing Director Charly Madan told Viet Nam News Agency on the sidelines of an annual dialogue between government and business on December 4.
However, Madan, who is also head of the working group on banking at the Viet Nam Business Forum, said that investors are all looking to see the licensing procedure to be accelerated further.
No foreign banks have been established since Viet Nam started receiving applications on April 1 of this year as part of its WTO entry commitments.
“ Viet Nam ’s WTO accession package included the commitment to open the sector to 100 percent foreign-owned banks from April 2007 and we would like to see this commitment adhered to fully and in the shortest time possible,” said European Chamber of Commerce Chairman Alain Cany.
According to State Bank of Viet Nam Deputy Governor Phung Khac Ke explained that licensing decisions must not only be based on regulations stipulated in Decree 22 on the organisation and operation of foreign banks and institutions in Viet Nam.
Even when those organisations meet all those requirements in Decree 22, they have to wait until a memorandum of understanding on information sharing has been signed between their state banks and the SBV, he added.
The Deputy Governor said the SBV has so far received five applications for setting up 100 percent foreign banks from three countries, but only one information-sharing agreement has been reached so far between the SBV and the Commonwealth Bank of Australia .
SBV has also received 19 applications for setting up foreign bank branches, including three applications from Australia’s Commonwealth Bank, the Republic of Korea’s IBK bank and Fubon of China’s Taiwan that have been technically approved.
At this year’s forum, the VBF banking working group suggested the Vietnamese Government continue working on improving the banking regulatory framework, formulating and making clearer regulations on consumer financial services and widening the foreign exchange band to make it more in line with market developments.- Enditem.
Source: Vietnam News Agency
