|The State Bank of Viet Nam's headquarters in Ha Noi. The bank is likely to double its charter capital to VND10 trillion (US$476.2 million) from August 15 this year. — VNS Photo Truong Vi
HA NOI (VNS)— The State Bank of Viet Nam is likely to double its charter capital to VND10 trillion (US$476.2 million) from August 15 this year in a bid to better stabilise the country's monetary market, according to a draft circular.
If the increase goes ahead, the Fund for National Monetary Policies will also be doubled as the draft states that the fund must be equal to SBV's charter capital.
SBV will be allowed to use the fund to stabilise the country's monetary market. Besides addressing the threat posed by credit institutions that fail and damage the banking system, SBV can also use the fund to contribute capital or buy stocks of credit institutions that are put under SBV's special controls due to weak finances.
Deposit Insurance of VIet Nam will also be allowed to borrow from the fund to maintain the stability of credit institutions in case other funds are not available for payment.
With the charter capital's increase, SBV will likely have to set aside double provisions for the Fund for National Monetary Policies to 20 per cent of annual difference between the central bank's revenues and expenses.
According to the draft, SBV will still maintain 10 per cent of its annual revenue-expense difference for the financial provision fund, but it will not be allowed to exceed 25 per cent of the central bank's charter capital.
SBV will report the fund's revenue and expenses to the Ministry of Finance every quarter. — VNS