The State Bank of Vietnam has refuted rumours that it intends to close financial companies.

It did however say in a statement released on Nov. 8, State-owned corporations and groups have many shortcomings, including spending too much money on non-core business, poor corporate governance and limited financial capability.

Decree 09/2009/ND-CP issued in February 2009 required these companies to reduce their non-core business investment, especially investment in the financial sector, including securities, banking and insurance, the bank said in its statement.

At its monthly meeting in September, the Government had reiterated the policy, saying that State-owned enterprises (SOEs) are no longer allowed to invest in non-core business, especially in the financial sector.

The Government also required that all SOEs having already poured their money into the financial companies must mull their capital withdrawal plan and halt their operations in such sectors soon.

In fact, State-run businesses had been divesting investments from the financial sector since 2008 by equitising financial companies or selling some shares in those companies, the bank said.

So far, the SBV has granted licenses to 18 financial companies including six wholly foreign invested ones specialising in lending consumption loans, four limited companies owned by SOEs and eight joint stock companies with over 25 percent of shares held by SOEs.

According to SBV, after 15 years of operations, these financial companies have played an important role in arranging loans from both inside and outside the country to SOEs while helping these corporations control their financial management.

These financial companies have also acted as a capital channel providing medium- and long-term loans to small- and medium- sized enterprises to operate, contributing to the country's modernisation and industrialisation process./.