VietNamNet Bridge – Kieu Huu Dung, Director of the Banks and Non-bank Credit Institutions Department under the State Bank of Vietnam (SBV), said that new banks would be set up by the year's end after a decade during which the central bank did not licence any new banks. Setting up new banks: green light on
 | | Kieu Huu Dung, Director of the Banks and Non-bank Credit Institutions Department under the State Bank of Vietnam | The newly promulgated regulation said that founding shareholders must not transfer shares within five years, while other shareholders must not transfer shares within three years. Will the provision violate the Enterprise and Securities Laws, if joint stock banks are considered public companies?
The question you have raised was voiced while we were compiling the regulation. However, I have to remind you that under the document guiding the implementation of the Enterprise Law, the establishment of banks will be covered by the Law on Credit Institutions, and SBV will set the conditions for bank establishment. Besides, the Enterprise Law stipulates that the Government has the right to set requirements on the establishment of companies in specific fields. In this case, the Government has drawn up a document authorising the Governor of SBV to stipulate the requirements.
The strict requirements mentioned in the newly enacted document aim to ensure healthy competition among banks, while they can help measure the commitment levels of investors when they decide to set up banks.
Under the newly promulgated regulation, investors must make heavy commitments. For example, bankers must show who will hold the most important posts. How can SBV supervise the commitment implementation of banks?
Investors must show who will hold the key posts in the banks. At least, the staffs must make commitments that they will work for the banks if the banks are licenced.
There will be two steps in licencing banks, SBV will approve the bank's establishment in principle first, and then will approve it officially. If you can satisfy basic requirements, you will get the approval in principle. When you can fulfill other procedures, you will get the official approval.
How long will it take to get licences?
I think it will take three months on average to get the approval in principle, and three more months to get official approval.
I know that many applications are now on the table of the State Bank. How many files meet the set requirements?
We have received more than 20 applications; however, all of them were sent before the new regulation was enacted. We have not made any official assessment on the applications.
Once the new regulation becomes valid (15 days after it is published in the official gazette), we will inform investors and ask them to change files as required. The investors will have to file applications again, and the day of file submission will be the day when investors submit applications again.
When will we see new banks set up under the new regulation?
This year, I think.
Many localities are seeking permission to set up local banks. What is your viewpoint on this?
It would be a big mistake to think that banks would serve these localities, because banks must operate nationwide. Besides, banks’ operations must not be controlled by local authorities. If authorities could influence banks, this would have bad impacts on banks’ operations.
If considering the provisions in the newly enacted regulation, not all localities can meet the stipulated requirements. For example, it is stipulated that banks must have at least three shareholders which are big enterprises and have the maximum capital of VND500bil. Only a few localities, including Binh Duong, HCM City and Hanoi, can meet the requirements, while other localities cannot. Of course, Hanoi-based enterprises can make capital contributions to a bank in another province, but enterprises in big cities do not like making investment in banks in other localities.
Now more and more general corporations and groups want to set up their own banks, so therefore they will have influence on banks’ operations. What should the central bank do to limit the influence?
Enterprises are not allowed to borrow money from the banks to which they make capital contributions. The Electricity of Vietnam, for example, and its members are not allowed to borrow money from An Binh Bank. Besides, one shareholder can hold 20% of the shares of a bank at maximum.
Phuoc Ha | 
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