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Vietnam Business » Vietnam Stock Market News » Vietnam Likely to Ease Securities Investment Lending

Vietnam Likely to Ease Securities Investment Lending

Regulation on funding securities investment is one of the key topics in the draft law on credit institutions which was discussed at the National Assembly (NA) meeting on May 22.

National Assembly Standing Committee proposed to lift the ban on lending securities investments by the local commercial banks and foreign banks branches to boost stock market liquidity and attract more investments , to increase Vietnams financial market and banks competitiveness and advantages, the state-run online newspaper VnEconomy reported.

The new draft law also stipulates that the State Bank of Vietnam (SBV) is the legal body to set limits and conditions for funding securities investments to ensure systems safety as this operation is very risky.

The draft law has a comprehensive and detailed regulation on banking operations, said Ha Van Hien, chairman of NA Economic Committee. Accordingly, newly established banks are allowed to immediately run 20 banking services, and only have to seek approvals for six other risky operations.

NA deputy Cao Sy Kiem, former Governor State Bank of Vietnam from 1989 to 1997, said the draft law facilitates banks to be more active and provides stricter control though it needs more quantitative guidance from the SBV.

NA deputy Nguyen Dinh Quyen said the draft law should limit the percentage of charter capital that commercial banks and their subsidiaries are allowed to buy rather than leaving the decision to the SBV to avoid any arbitrary application, citing the current level under the law at 11%.

The National Assembly is due to vote for the new draft law on credit institutions on June 16 afternoon session.

Vietnam Business And Financial News Network. Source [stox.vn]

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