Bank sector urged to use TPP benefits

Wednesday, Apr 13, 2016 08:21

"Viet Nam will open its market to electronic payments through credit cards without any restrictions on the number of card companies." — Photo

HCM CITY (Biz Hub) — The Vietnamese banking industry should take advantage of the Trans Pacific Partnership to develop and integrate with global markets, a seminar heard in HCM City yesterday.

"Viet Nam will have the chance to attract more foreign investment in its banking industry," Luong Hoang Thai, head of the Ministry of Industry and Trade's Multilateral Trade Policy Department, said.

Speaking at the seminar titled "TPP: opportunity and challenge for financial industry and Vietnamese enterprises' business development", he said, "Greater participation of foreign investors will help the industry strengthen its resources, technology and management as well as to expand co-operation."

His deputy Ngo Chung Khanh said "The TPP is a new model for regional economic co-operation, and creates the most favourable conditions for trade and investment."

He pointed out that when the TPP came into effect, local companies would benefit from a more transparent business environment, larger export markets, lower prices of goods and services, and a chance to join global supply chains and borrow from international sources.

But he also warned that competition would increase significantly with respect to certain products.

"Domestic enterprises must compete for capital and human resources with foreign investors and, if they want to join the supply chains, improve their management and technologies."

They should know what Viet Nam's obligations are, change their mindset in the new scenario, make long-term business plans, improve their competitiveness and seek co-operation with international partners to join global supply chains, he said.

Vu Minh Chau of the State Bank of Viet Nam (SBV)'s International Co-operation Department spoke about Viet Nam's TPP obligations.

"TPP members are committed to retaining existing policies. In case of amendments, freer ones will be allowed." She was referring to the fact that any changes in commercial policies mean they have to be loosened in favour of foreign entities and not tightened.

"The TPP stipulates that members have to offer national treatment to financial organisations, meaning they cannot discriminate between local and foreign ones," she said.

"Viet Nam will open its market to electronic payments through credit cards without any restrictions on the number of card companies.

"Foreign credit institutions can set up representative offices, branches of foreign banks, joint venture banks and banks with 100 per cent foreign capital more easily.

"The SBV must have a comprehensive legal framework to be in line with the TPP."

She added that the challenges faced by local banks were "limited financial products, poor governance, and middling risk management." — VNS

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