Prime Minister Nguyen Xuan Phuc and leaders of the State Bank of Vietnam chair the conference launching the banking sector's tasks in 2020. (Photo: VietnamPlus)
Hanoi (VNA) - After proposing the Government amend Decree 91/2015/ND-CP, the State Bank of Vietnam (SBV) will coordinate with the Ministry of Finance to seek the Prime Minister’s approval for increasing capital for banks.
On January 2, at a conference to launch the banking sector’s tasks in 2020, leaders of many major commercial banks including Agribank, BIDV, Vietcombank, VietinBank, VIB and HDBank continued to raise the issue of increasing charter capital. This shows that it remains the most pressing issue of State-owned banks.
The Bank for Investment and Development of Vietnam (BIDV) had just completed a deal with a foreign partner, earning a record of over 860 million USD. However, its Chairman Phan Duc Tu asked the Government to soon consider allowing the bank to increase charter capital by issuing more shares. Besides this, procedures for the issuance of shares for existing shareholders and employees should be simplified, he said.
Nghiem Xuan Thanh, Chairman of the Bank for Foreign Trade of Vietnam (Vietcombank), also proposed the Government create favourable conditions for commercial banks, especially state-owned ones, to increase their charter capital from capital surplus, after-tax profit, and more share issuances. The Government should also work out mechanisms and policies to attract the participation of foreign investors in the local banking system by raising the foreign ownership cap at local banks.
According to Le Duc Tho, Chairman of the Vietnam Bank for Industry and Trade (VietinBank), the Government and relevant ministries and agencies should quickly complete the amendment of Decree 91/2015/ND-CP on the investment of State capital in enterprises and the management and use of capital and assets at enterprises so that commercial banks with State capital can raise their charter capital and meet Basel II standards.
The Vietnam Bank for Agriculture and Rural Development (Agribank), which has the lowest charter capital among the four State-owned banks, will mobilise resources for equitisation and complete its restructuring plan in association with bad debt settlement this year, said Agribank General Director Tiet Van Thanh.
If the bank is not allowed to raise its charter capital or apply special policies, it may face difficulties in expanding credit and supplying capital for the economy, he added.
Therefore, Thanh asked the Government and the State Bank of Vietnam to provide 19.8 trillion VND (854.8 million USD) in charter capital for Agribank as previously proposed.
In response, SBV Governor Le Minh Hung said that the SBV will coordinate with the Ministry of Finance to submit plans to raise the charter capital for State-owned banks to the Government.
For Agribank, the wholly-State-owned bank, the Government decided to submit the plan to the National Assembly this year to arrange the budget for increasing its charter capital.
Regarding Vietnam added to the United States’ list of countries being monitored for possible currency manipulation, Hung confirmed that the central bank would never use the exchange rate to compete with the country’s trade partners or abuse monetary policies to ease trade activities.
Amid international market volatility, the SBV has flexibly managed the reference rate, thus stabilising the local market.
Vietnam's foreign reserves has amounted to more than 79 billion USD. In 2019, the central bank bought nearly 20 billion USD and contributed 19.5 trillion VND to the State budget, the governor noted.
As for plans for this year, the central bank is targeting a 13 percent growth rate for all modes of payment and credit growth of 14 percent.
The SBV will also research and propose solutions to settle bad debts at credit institutions in the 2021-2025 period, keeping the bad debt ratio below 2 percent, he added./.
