Socialist Republic of Vietnam

(Viet Nam News, February 19, 2003)

HA NOI — The banking sector needs to embrace international safety systems within the next five years to ensure steady development of Viet Nam’s financial system, Prime Minister Phan Van Khai has said.

Speaking at a conference of the State-owned Vietcombank on Monday, he said that commercial banks should offer more services, save on social costs, reduce the use of cash and enable the Government to manage funds more efficiently.

Khai urged the expansion of banking services to enable every Vietnamese individual to access them.

Banks should ensure their intermediary role in distributing capital and seek ways to tap the huge quantity of idle funds with the public for development needs, the PM said.

He pointed out it was vital for commercial banks to devise their own strategies for international integration in the face of the global economic stagnation and political uncertainty.

As for Vietcombank, the PM exhorted it to work closely with the State Bank of Viet Nam to work out more convenient models of international payment to facilitate exports.

He hailed banks, especially Vietcombank, for positive changes in the sector after two years of reform.

Khai lauded Vietcombank’s efforts to get rid of bad debts, and to strengthen its books, enabling the banking sector to salvage some of its reputation.

"Vietcombank has worked out the right strategies, which also conform with the socio-economic development vision of the Party and State and the country’s monetary policies," he said.

PM Khai praised the bank’s credit programme for small and medium enterprises but urged it to help the private sector get easier access to capital.

General director Vu Viet Ngoan revealed that Vietcom-bank has set itself a target of becoming a banking institution of "regional calibre" by 2005, by when it eyes a statutory capital of US$630 million and profits of 10 per cent.

It has mobilised deposits of about $4 billion in foreign currency so far with loans accounting for half of the amount. — VNS