Vafi proposes solutions to strengthen the domestic banking system

VAFI proposed that SBV slash the number of joint stock commercial banks by 15 to 20 per cent via merger, acquisition, dissolution and nationalisation in an effort to consolidate the domestic banking system.

In a letter sent to the newly-appointed SBV’s Governor, Nguyen Van Binh, VAFI said that the central bank should not allow the establishment of new financial insurance and gold trading companies, as it was ineffective to the local banking system as well as the economy.

In regards to the forex market, the association requested that the SBV raise banks’ obligatory reserves for US dollar against Vietnamese dong, reducing deposit interest rates on the foreign currency to 1 per cent per year, while limiting the number of subjects allowed to borrow foreign currencies from banks.

Also, the central bank should increase availability to 35 per cent, from the existing 10 per cent, for foreign investors to own non-voting shares of local domestic banks, according to the association.

Nguyen Hoang Hai, general secretary of VAFI said that gold exports and imports should be removed in order to regulate the domestic gold trading market more effectively. – VNS

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial

Posted by VBN on Aug 12 2011. Filed under Banking-Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry