Draft bank laws win praise

HCM CITY — Economists and other business leaders yesterday hailed the newly amended draft laws adopted by the National Assembly on the State Bank of Viet Nam and credit organisations, saying they were critical for sustainable economic growth.

Speaking at a seminar in HCM City, the former governor of the State Bank of Viet Nam, Cao Si Kiem, said the amended law on the State Bank had identified the bank's specific responsibilities and tasks.

Kiem, who is also chairman of the Viet Nam Small–and Medium-Sized Enterprises Association, said that under the draft law the State Bank would supervise and inspect commercial banks and the circulation of foreign currency.

In addition, the law requires the bank to be transparent in its dealings and information, and demands that it forecast risks and offer advantageous policies for businesses and the general public.

Another amended law that affects business growth positively gives credit organisations financial autonomy, and allows them to develop an organisational network, generate capital and choose their operation scale.

"To increase business competitiveness in domestic and global markets, Kiem said, banks in general needed to invest in modern technology, especially for payments, to ensure security and quality services for businesses and customers."

In addition, he said "there was a need for new management of foreign exchange and the use of the Vietnamese dong instead of heavy dependence on the US dollar, which tends to fluctuate."

Better management of foreign exchange would also help promote investment and business growth, he added.

Kiem said during the NA's last session, deputies discussed related banking issues that could affect the business community, including capital, interest rates, the exchange rate, and transparent procedures.

He pointed out that lower interest rates on loans were needed to ease credit for businesses, and noted that capital should be distributed in a timely manner.

Kiem said, "the deposit interest rate was expected to reach 10 per cent, and the lending interest rate, 12 per cent."

Also speaking at the seminar was Le Tham Duong, head of the Banking University's Business Administration Department, who noted that, "lower interest rates would benefit exporters, especially those in the agro-forestry and fishery industries."

He said that specific solutions to improve linkages between businesses and banks must be proposed and developed.

Many businesses are unaware of the country's laws and policies, according to Duong.

He said the lack of knowledge had led to ineffective management of SMEs, which often do not understand loan procedures.

"Even though three-fourths of small – and medium-sized enterprises must rely on bank credit, many of them are not aware that creating brands and trademarks could help them better access loans."

Macro-economic effects

In a related matter, economic restructuring, which was discussed at the NA's seventh session, was also mentioned as a positive driver of business growth by seminar speakers.

Nguyen Duc Kien, NA Vice Chairman, said that, "it had a great impact on business growth and investment as it is directly related to specific monetary and capital policies."

He noted, "businesses had been urged to focus not only on economic growth but also on environmental protection and social security, which would contribute to the improvement of people's lives."

He said the Government planned to offer appropriate tax policies to make it easier for businesses to invest in environmentally-friendly technology. — VNS