Vietnam News Network

One of the most important provisions of the drafted credit institution law is that the maximum ownership ratio of investors will be smaller.

Meanwhile, the credit institution bill stipulates one individual shareholder can hold up to five percent of a bank, while one institutional shareholder can hold up to 10 percent.

The draft credit institution is currently under discussion at the ongoing National Assembly session.

After collecting opinions from the National Assembly, law drafters will continue working on the bill to perfect it before it is submitted to the National Assembly for ratification in 2010. The law is expected to take effect on January 1, 2011.

Chairman of the National Assembly’s Economics Committee Ha Van Hien, admits that it is necessary to set a cap on the ownership ratio of investors at credit institutions, on the other hand, he says proposed ownership ratios are too low.

The economics committee has also pointed out that the bill has not covered some ‘important banking services’ provided by non-bank organizations.

Securities companies are now providing banking services, such as providing credit through repo and margin trading services, while the securities depository centre is providing offset payment service.

“These services are popular banking services which come in line with the current laws and international practice,” Hien said.

Hien’s committee fears that if the services are not mentioned in the credit institution law, this may lead to the fact that securities companies and securities depository centre will have to stop providing the services after January 1, 2011, when the new law takes effect.