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Development bank told to restructure operations

Update: March, 30/2012 - 09:47

HA NOI — Viet Nam Development Bank (VDB) has been asked to submit its restructuring plan and development strategy to 2020 to the Government for approval.

Under Instruction 118/TB-VPCP issued by the Government on Wednesday, Deputy Prime Minister Vu Van Ninh asked the State Bank of Viet Nam (SBV), in co-operation with the Ministry of Finance, to help the VDB classify its debts, and make provisions for bad debts and forex operations under existing regulations.

Specifically, the bank was asked to review its existing policies regarding State investment loans and export financing. It must also review its operational model and look into similar bank models in foreign countries.

Good experiences from similar bank models in foreign countries that meet Vietnamese standards would be applied to the VDB's restructuring plan and its development strategy during the next period, the instruction stated.

Deputy Prime Minister Ninh said the bank needed to clarify its role, position, functions and tasks in the national banking and financial system. VDB was still expected to operate as a bank as assigned by the Government to lend in certain fields with specific tasks.

Ninh instructed the ministries of Finance, Planning and Investment and the State Bank to review part of Government Decree 75/2011/ND-CP on State investment credit and export credit which has been blamed for several obstacles affecting VDB's lending operations.

The list of priority sectors to receive access to State loans for implementing key projects and a support mechanism for the State Major Programme were expected to be updated soon to help the bank lend more effectively.

VDB is the successor to the Development Assistance Fund and was established through a Prime Minister decision in May 2006.

VDB is a non-profit, policy lending institution. Together with the Viet Nam Bank for Social Policy, VDB is required to undertake the State policies regarding loans reserved for investment, development and export financing.

The bank has been assigned special tasks by the Government for reducing poverty through providing financing for construction of irrigation and rural transport works, traditional village infrastructure and socio-economic infrastructure in remote areas. — VNS

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