Foreign banks who want licences to operate in Vietnam
must have at least VND100 trillion ($4.76 billion) worth of assets in total,
according to the State Bank of Vietnam (SBV).
Circular 40/2011/TT-NHNN,
announced by the central bank last week provides that banks must have profited
during the past five consecutive years before applying for operating licence.
Under old regulations, foreign
banks were required to have VND50 trillion ($2.38 billion) in total assets and
profited in the last three consecutive years only.
The new circular also regulates
that banks must not be founder shareholders, strategic shareholders or founders
of any Vietnamese credit institutions or local banks.
Specifically, regulations on
the issue of bad debt under the old circular will be replaced by new
requirements in terms of risk management and provision while bank names and
headquarters also come under scrutiny.
The central bank said the new
circular will help restrain unhealthy competition amongst banks on the domestic
market and ensure that foreign banks have sufficient financial capabilities.
The issue of the new circular
aimed at satisfying the banking system's administrative reform while enhancing
the State role in managing foreign banking operations in Vietnam .
The circular will come into
effect at the beginning of February next year.
VIR - VNA
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