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Vietnam needs more than 80 banks: experts
Real estate news By Vietnam Economic Times
09/10/2007
While some people are calling on the State Bank to limit the number of banks in Vietnam, other experts say Vietnam needs more than the 80 operational banks to meet the increasing demand for banking services in the country. The experts deny the opinion that Vietnam has so many banks now that it does not need any more. They, on one hand, agree that it is necessary to consolidate, develop and expand the business scope of existing banks so they can become stronger and bigger, and on other hand, think that it is necessary to establish more and more banks.
Charly Madan from Citigroup Vietnam said that the demand for finance and banking services in Vietnam proved to be very big, as the country was in the developing period and building a market economy. Currently, only 5-7% of Vietnamese people use banking services, while enterprises, especially small- and medium-sized ones, find it hard to access bank loans. However, he said that in order to gain sustainable development, Vietnam needed to programme the banking system’s development, while avoiding the establishment of a massive number of banks, and renovate the administration apparatus to make banks more competitive.
According to Techcombank’s Director General Nguyen Duc Vinh, while Vietnam’s banks gain the impressive growth rates of 30-40% per annum, the number of clients using banking services remains modest if compared to the high population growth rate. “The government plans to give support to the banking system’s development, and this would be a golden opportunity for investors who plan to invest in banks. However, he has warned that not every investor can be successful when injecting money in banks if they do not have good development strategies.
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