Photo: Viet Tuan/Illustration
New fee schedule to come into being on January 1.
A new fee schedule will apply for the granting of licenses to foreign financial institutions in Vietnam from January 1, 2017.
For institutions providing banking services the fee will be VND140 million ($6,314) for an initial license and VND70 million ($3,157) for any modifications or extensions. Non-banking and financial institutions will be charged VND70 million ($3,157) for an initial license and VND35 million ($1,578) for any modifications or extensions.
Licensing for people's credit funds and microfinance organizations will be VND200,000 ($9) for an initial license and VND100,000 ($4.5) for any modifications or extensions.
Foreign bank branches, representative offices of foreign financial institution, and other types of foreign organizations providing banking services in Vietnam will be subject to a licensing fee of VND1 million ($45).
Licensing of intermediaries for a non-banking provider will be VND10 million ($450) for an initial license and VND5 million ($225.5) for any modifications or extensions.
There are 34 Vietnamese commercial banks operating in Vietnam, of which four are fully-owned by the State and seven having State ownership of over 50 per cent.
There are also six fully-owned foreign banks in the country: ANZ Vietnam, Hong Leong Vietnam, HSBC Vietnam, Shinhan Vietnam, Standard Chartered Vietnam, and Public Bank Berhad, while Woori Bank from South Korea has gained in principle approval from the State Bank of Vietnam (SBV) to open.
Fifty-five other foreign banks operate in Vietnam in the form of a branch or representative office providing financial services.
There are also three joint venture banks and foreign entities. “Foreign banks in Vietnam hold certain advantages over Vietnamese banks,” Mr. Nguyen Hoang Minh, Deputy Director of the Ho Chi Minh City branch of the SBV, has said. These include capital efficiency, asset safety levels, and high quality and diverse products.
According to a report from the National Institute for Finance (NIF) under the Ministry of Finance released in August, foreign banks previously focused on serving foreign enterprises but are now increasingly working with domestic customers.
The banks are seeking to diversify their profit structure with credit growth rather than foreign exchange services, as previously. This is reflected in the competitive interest rates they have offered in recent times.