Easing restriction on foreign banks in Vietnam
According to the State Bank of Vietnam, in 2003 two new branches and 4 new representative offices of foreign banks operating in Vietnam were opened, while one branch and four representative offices were closed. Consequently, numbers of foreign bank branches and representative offices in Vietnam now are: 27 branches, 4 joint venture banks, 3 finance leasing companies under JV or 100 percent foreign investment, and 42 representative offices.
In 2003, outstanding credit balance of these foreign bank branches increased 21 percent against 2002. However, their total market share on credit operation accounted only 7.56 percent, lower than that of 8.4 percent in 2002. Foreign currency lending increased higher than lending in VND.
Operation of joint venture banks in the year increased higher than that of foreign bank branches. Total assets of joint venture banks increased 40 percent, while their mobilized capital increased 50.7 percent, according to statistic figure updated on 30/10/2003.
Despite, restriction on mobilization of VND for foreign banks has been eased, their mobilization of VND remained face difficulties due to high interest rate and some other restriction. According to an official from the State Bank, in 2004, the bank will push its process on further easing restriction on foreign bank operation in Vietnam, improving legal corridor for foreign bank branches . The government will allow to further ease restrictions on foreign bank operation in the country, in line with process of international integration, to develop Vietnam’s financial money market with transparency, equality and healthy competition, the official said.
Vietnam Economic Times - December 23, 2003.
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