HA NOI — The State Bank of Viet Nam has asked the Government to allow foreign investors to buy more shares in commercial banks, acting Chief Inspector of the State Bank of Viet Nam, Nguyen Huu Nghia, told Viet Nam News yesterday.
Nghia said the State Bank's proposal would be discussed at the next cabinet meeting.
State Bank Governor Nguyen Van Binh said that increasing foreign ownership of commercial banks was a solution proposed in the scheme to restructure the credit institution system.
However, he warned that if the task was not carried out thoroughly, it would harm the interests of the nation.
Binh said Viet Nam's economy was in difficult circumstance and banking shares were low. He said it was likely that foreign investors would rush to buy bigger stakes in commercial banks.
However, when the economy got back on track, he said it would be impossible for domestic investors to regain their majority rights in these banks.
Binh said that restructuring the banking system would be a healthy move, and there was a possibility of selling more stakes at better prices to foreign investors.
Chairman of National Financial Advisory Committee Vu Viet Ngoan said Viet Nam would be able to restructure its banking system without assistance from foreign capital sources.
Some economists argued that because of the bad management of weak commercial banks, opening up to more room for foreign investment should be done with care.
However, if restructuring them with domestic capital sources did not work, the State Bank should sell them to foreign investors.
Vice Chairman of the Ha Noi Young Business Association Tran Anh Vuong said many European business groups wanted to invest in Asia.
He said that if Viet Nam loosened its cap on foreign ownership of commercial banks, it would attract huge amounts of foreign capital. Many foreign investors believe investment in Viet Nam's banking market as showing good potential.
They are also keenly watching Government moves relating to the purchase of bad debts and increasing stock available to foreign investors. They said if the Government didn't increase share sales to foreign investors, their investments in Viet Nam's banking system would be at risk. —VNS