The establishment of international financial centres is crucial for Việt Nam’s development. — Photo 1thegioi.vn

 

The State Bank of Vietnam (SBV) is concerned that a Ministry of Planning and Investment (MPI)’s proposal on removing the foreign ownership cap and foreign investment conditions of banks or credit institutions headquartered in the country's international financial centres, can pose risks.

 

The concern was made after the MPI made public a draft resolution on the establishment of international financial centres in Vietnam, asking for comments. The draft resolution includes regulations on members of the centres established by foreign investors.

 

Under the draft, the MPI proposes that banks or credit institutions headquartered in Vietnam's international financial centres not be subject to foreign ownership restrictions or foreign investment conditions when providing services in the centres or cross-border services.

 

However, the SBV believes that this proposal needs further review to limit risks.

 

The SBV explains that the foreign ownership ratio and foreign investment conditions when providing services in the centres are directly related to Vietnam's trade and investment commitments.

 

Therefore, the SBV believes that the draft regulation needs to be further considered to limit the risk of violating obligations in Viêt Nam's trade and investment protection agreements.

 

Under the draft resolution, the MPI also proposes that the formation of a digital banking model of commercial banks will be implemented in the centres from January 1, 2026.

 

In addition, the MPI expects the roadmap for applying international banking standards Basel III will also start in the financial centres from January 1, 2026.

 

However, the SBV believes that the roadmap for applying Basel III at the centres needs to be consistent with the roadmap that has been applying for commercial banks and branches of foreign banks in the country.

 

The SBV suggests that in case of needing immediate application, the MPI should clearly stipulate that the roadmap for applying international banking standards Basel III for foreign investors will be implemented in the financial centres from January 1, 2026 and this is considered a condition for granting a establishment licence in the centres.

 

According to officials, the establishment of the international financial centres is crucial for Việt Nam’s development.

 

The country is focusing on key national projects and global integration, so it needs to mobilise funding effectively, for which the financial centres can play a role in attracting international investors.

 

Vietnam has so far also met all the major conditions for building an international financial centre.

 

Firstly, the country’s GDP in 2024 was around US$470 billion, making it the 33th largest economy in the world, with stable economic growth. It also has an open and integrated economy with 17 free trade agreements signed with 65 leading economies around the world.

 

Secondly, Vietnam’s stock market has been growing strongly with capitalisation of around VNĐ7.2 quadrillion, equal to more than 70 per cent of the national GDP.

 

It has also achieved remarkable results in improved institutions, connective infrastructure and smart governance.

 

Vietnam is politically stable and its social order is maintained, creating a safe environment.

 

The establishment of the financial centres will help Vietnam connect with the global financial market and attract foreign financial institutions and international investment to promote socio-economic development.

 

It will also promote the development of Vietnam's financial market effectively, following international standards. — BIZHUB/VNS

 

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