TPP will open up opportunities for foreign financial institutions to contribute stakes to joint stock commercial banks

Deputy Head of the Multilateral Trade Policy Department under the Ministry of Industry and Trade Ngo Chung Khanh said that through the Trans-Pacific Partnership (TPP), foreign financial institutions are allowed to join the Vietnamese market under diversified forms including representative offices, branches, joint-venture banks, wholly foreign invested banks, and others.

At the same time, TPP will open up opportunities for foreign financial institutions to contribute stakes to joint stock commercial banks operating in Vietnam at a limited proportion.

The total percentage of foreign shareholding in a joint stock commercial banks in Vietnam should not exceed 30% while the ownership limit of shares of strategic investors is 20%.

In addition, foreign financial institutions are eligible to establish joint-venture financial companies, wholly foreign invested financial companies, joint-venture financial leasing companies and wholly foreign invested financial leasing companies.

To facilitate TPP member countries in approaching and operating effectively in their respective markets, the TPP has put forth transparent measures and policies regulating operations of financial institutions including national treatment, market access, cross-border trade, senior personel, board of directors, among others.

Vu Minh Chau from the Department of International Co-operation under the State Bank of Vietnam said that Vietnam pledges to open the card market with international codes and allows foreign suppliers to provide cross-border clearing payment services.

According to General Secretary of the Vietnam Banks Association Tran Thi Hong Hanh, TPP will create prospects for the Vietnamese trade sector with strong growth and open opportunities for Vietnamese commercial banks to provide capital and services for exporters in the future.

Moreover, the Vietnamese banking system will be able to access trust funds with lower costs thanks to the improved position of Vietnam thanks to the TPP, Hanh noted.

She added that the wide participation of foreign investors will help expand co-operation opportunities and improve governance and financial capacity for domestic banks, the basis for the development of the Vietnamese banking sector.

(Source: Nhan Dan)