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Vietnamese banks withdrawing money from overseas accounts
Banks are taking out money they deposited at foreign banks in a move to avoid problems associated with the US financial crisis, according to the Monetary Policies Department under the State Bank of Vietnam.
According to the department, banks and the domestic monetary market are still operating normally. Commercial banks have also been still operating well as they did not have direct relations with investment banks and financial institutions which went bankrupt or are facing financial problems.
Domestic bankers have withdrawn money they deposited at foreign banks or financial institutions to avoid possible bad impacts of the financial crisis. Some of the money has been deposited at prestigious banks in Hong Kong and Singapore for flexible use.
In Vietnam, 100% foreign-owned banks, foreign bank branches and joint-venture banks have been operating normally as their parent banks have not been heavily affected by the crisis.
In an effort to minimise risks from the US financial crisis, Prime Minister Nguyen Tan Dung has asked ministries to check capital flows which could be influenced by the crisis.
The Prime Minister has asked the State Bank of Vietnam and the Ministry of Finance to immediately check investments and deposits by domestic banks at foreign institutions, and restructure the portfolios.
The State Bank of Vietnam and Ministry of Finance have also been asked to check the investments and business operations of foreign banks in Vietnam. The two ministries later need to provide the Ministry of Foreign Affairs with a list of banks and assessments of their commitment levels so that overseas Vietnamese representative agencies can keep an eye on the institutions and give warning if necessary.
The Prime Minister has also asked the State Bank of Vietnam to complete draft regulations on mergers and acquisitions to legalise M&A deals. This will help pave the way for the purchases of weak banks to restructure the banking system.
The Prime Minister affirmed at a meeting with representatives of ministries and branches and economists on October 1 that the State Bank will ensure the normal operation of the banking system, and that ‘no bank will be allowed to collapse due to problems in liquidity’.
VNN
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