HA NOI(VNS) — The Government asked the State Bank of Viet Nam (SBV) and other government agencies to come up with changes to current regulations to promote foreign ownership in Vietnamese commercial banks, said Nguyen Van Nen, Chief of the Government Office at a meeting last Saturday.
Nen said that foreign investors are currently not allowed to put more than 30 per cent of charter capital in a Vietnamese commercial bank.
He said that the move to update regulations comes as Viet Nam tries to create a more inviting environment for foreign investors to set up long-term businesses in the country.
Financial institutions in the country also need restructuring to improve administration, working efficiency and their bad-debt ratios, he added.
The State Securities Committee declined to comment on the story.
One of the recent tactics used to achieve the restructuring requested by the government is widespread merging.
The SBV went on a campaign, merging with weaker banks and thereby reducing the field from 35 in 2014 to the current 20 banks.
The merger trend is not ending. Mekong Housing Development Bank (MHB) will merge with the Bank for Investment and Development of Viet Nam (BIDV) next month and Petrolimex Group Commercial Joint Stock Bank (PG Bank) will merge with Vietinbank later this year.
Experts said that more mergers will continue in Viet Nam in order to strengthen the country's banking system.
After all the mergers, the Central Bank managed to limit their bad-debt ratio to 3 per cent this year. — VNS