Wednesday, 25/4/2018
Enhancing the effectiveness of the current banking system in Viet Nam
8/8/2013 21:38' Send Print

Over the past 25 year, the State has developed a legal environment for monetary-credit and banking activities which conform to the transitional process and Viet Nam’s international integration. Under laws and ordinances have basically promulgated in time which created a foundation for safe and effective banking operation. The banking system has played a key role in supplying credit for the economy and ensure maximal amount of credit for agriculture, rural development and capital to social programmes, policies and security.

Besides, big problems have also found in the banking operation in Viet Nam in recent years such as inflation, high lending interest rate, bad debts, and unstable exchange rates. Especially, the State Bank’s measures and methods to manage gold market for monetary and exchange rate stability have not yet won public consensus. Some causes are: the State Bank is not independent in its management; the coordination between financial-year, trade and monetary policies has not closely associated and synchronous; ineffective policies on state enterprise management; ineffective state credit; system of supervision, monitoring, control and internal audit of the banking system is ineffective and there are many constraints in management of real estate market. In general, subjective and voluntary mindset remains and does not conform to the market mechanism. Constraints are also found in economic projection and planning.

To enhance the capacity of the banking system, the immediate and long-term solutions are to improve capacity to develop and implement monetary policies and state management of banking system, gradually using indirect tools for implementing monetary policies; to restructure credit system; and to continue expand credit policies’ effectiveness for development of agriculture, and rural and difficult regions./.

Assoc. Prof., PhD., Nguyen Dac HungDeputy Editor-in-Chief of the Banking Review