Non-U.S. banks allowed to double dong deposits
The State Bank of Vietnam (SBV) issued a decision last week allowing non-U.S. foreign bank branches to double their deposits in Vietnamese dong.
Under Decision 1084, these branches can from October 1 increase dong deposits from both individuals and organizations to half of their chartered capital instead of 25% as at present.
This move has been anticipated earlier in a central bank's tentative scheme on removing restrictions on non U.S. foreign bank branches in Vietnam.
The tentative scheme stated that the higher dong ratio rule would be applied only to call deposits, while any increase in time deposits and savings would be considered by the Government under the process of Vietnam's accession to the World Trade Organization as well as bilateral commitments with other countries.
Decision 1084, however, entitles non-U.S. foreign banks to double dong funds in time deposit and savings as well. "The incentive aims to eradicate the discrimination between U.S. banks and non-U.S. banks," said an official at the SBV's Banks Department.
U.S. banks JP Morgan Chase and Citibank with branches in Vietnam are permitted to take the equivalent of 200% of their chartered capital in dong deposits in accordance with the Vietnam-U. S. bilateral trade pact that came effective in December 2001.
The source said another American bank was filing application to open a branch in HCMC.
Vietnam now has 32 foreign bank branches and 42 rep offices of foreign banks.
SGT Daily
(25/09/2003)
