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ECONOMY

Vietnam c.bank to ease regulations on establishment of banks

Updated at Monday, 06 Aug 2018, 11:46
The Hanoitimes - The focus is on amending and removing a regulation on setting conditions for granting permits for the establishment and operation of joint stock commercial banks.
The State Bank of Vietnam (SBV), the country's central bank, has disclosed a draft circular simplifying administrative procedures and business conditions in the banking system at the government's request, including easing regulations on establishment of banks, VietnamFinance reported.
 
Illustrative photo.
Illustrative photo.
The focus is on amending and removing regulations stipulated in Article No.9 of Circular No.40, providing conditions for granting permits for the establishment and operation of joint stock commercial banks. 

According to the draft circular, the founding shareholders must together own at least 50% of charter capital of a would-be joint stock commercial bank, but they are no longer required to own "within five years from the date of being granted the license."

Concurrently, the SBV suggested removing regulation that founding shareholders, being either individuals or organizations, must have "financial ability to contribute capital to establish a joint stock commercial bank."

Notably, the SBV also removed three conditions for founding shareholders, including "take full responsibility for the legality of contributed capital source", "commit to support the joint-stock commercial bank in finance to solve problems in the case of joint stock commercial bank meeting difficulties of finance or liquidity", and "have at least two institutional founding shareholders as."

With regard to circular No. 30 providing regulations on issuance of licenses, organization and operation of non-bank credit institutions, the draft law also removes three conditions which are "have at least two institutional founding shareholders," "secure sufficient financial resources in order to establish non-bank credit institutions", and "undertake to provide financial support to non-bank credit institutions for difficulties in capital, solvency and liquidity".

The government has set target of removing 50% of total business conditions at all ministries and ministry-level agencies before October 31, which is part of the effort to achieve the goal of a market economy. 

Among government agencies, the Ministry of Industry and Trade and the Ministry of Health stood out as examples, by removing 55.5% and 70% business conditions, respectively. 

In a directive issued on July 13, Prime Minister Nguyen Xuan Phuc strictly prohibited government agencies and ministries from creating new business conditions or abusing specialized inspection.

According to the PM, business condition removal is one of the key measures for economic growth and efficiency, requiring strong efforts from government leaders and ministers. 

Phuc requested concerned ministries to submit proposals on reforming the specialized inspection process and simplifying business conditions before August 15. 
Ngoc Thuy
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