|
Capital requirements aim to protect banking system
As many as 21 joint-stock and five joint-venture banks may be forced to raise their charter capital to at least VND2 trillion (US$113 million) by the end of this year.
The State Bank of Viet Nam (SBV) has proposed the figure to the Government as a way to ensure the 26 banks have the VND3 trillion ($169.5 million) of charter capital they will be required to hold by the end of 2010.
Approval will enable the central bank to act against those which fail to raise the money.
The suggestion is part of a plan drafted by the SBV intended to ensure the sustainable development of the domestic banking system.
The central bank has been collecting public views as to what to do about the country’s struggling banks since late February.
As a result, poor-performing credit institutions seem destined to merge, liquidate or be acquired by the central bank if their possible collapse was to threaten the banking system.
The goal of the draft plan is to establish safer, better-performing larger-scale credit institutions that accord with the trend to global integration.
It deals with merger and acquisitions by State-owned banks, joint-stock banks, joint-venture banks, foreign banks and co-operative banks.
Up to nine small banks in danger of closure late last year because they each had a charter capital of less than VND1 trillion ($57.47 million) have managed to raise enough money to stay open.
Viet Nam has 40 part-privatised and joint-stock banks; four State-owned banks; one bank for social policies; one for development; two wholly foreign-owned banks; five joint-venture banks and about 40 foreign-bank offices.
One institution provides deposit insurance.
Three foreign banks have been granted licences and are expected to debut as wholly foreign-owned banks this year.
April snapshot
Investment is estimated to have increased by 4.86 per cent in April against March or 11.16 per cent against the end of 2008, says the State Bank of Viet Nam on its website.
April dong investment was up 5.81 per cent and US dollar investment up 0.65 per cent against March.
The banks had provided VND254.9 trillion ($14.4 billion) in subsidised dong loans as of April 23.
Total deposits were reported to have increased by 3.74 per cent against the end of the previous month or 9.88 per cent against last December. Deposits in dong were up 4.52 per cent against March.
Dollar deposits were up 1.07 per cent.
Yearly interest for dong deposits increased 0.2-1.5 per cent to 7.1-8.6 per cent while the prime rate remained at 7 per cent.
The yearly lending rate ranged from 8-10.5 per cent.
Yearly interest for dollar deposits was down 0.5-1 per cent to 1.4-2.81 per cent. per year.
Many commercial banks have increased their interest rates for dong and launched promotion programmes to attract long-term deposits in an effort to meet increased demand for capital.
The Maritime Bank is offering the highest yearly rate: 9.3 per cent for 48 months; 9.2 per cent for 36 months and 8.3 per cent for 12 month.
The yearly rate offered by the HCM City Housing Development Bank is 8 per cent for four months; 8.8 per cent for 12 months and 9 per cent for 18 months.
The Military Bank has raised its deposit rates by between 0.2 and 0.4 per cent for terms between 12 to 60 months. Its maximum yearly rate is 8.6 per cent for a 60-month deposit.
Higher deposit interest
The Viet A Bank is offering a yearly 8.6 per cent for 36-month deposits plus additional yearly interest of 0.03-0.6 per cent depending on the amount.
"There is now a huge demand for capital thanks to the Government’s stimulus packages," said Viet Nam Bank Association general secretary Duong Thu Huong.
"The central bank should maintain the basic interest rates at least to June to ensure stable capital sources for commercial banks as well as a stabile exchange rate," she said.
Viet Nam Association of Financial Investors general secretary Nguyen Hoang Hai said the higher interest on offer would not cause inflation because the mobilising of funds, including through share issues, had become difficult.
VietNamNet, Viet Nam News
|
