According to the State Bank of Viet Nam (SBV), the banking sector during the past five years was in a drastic overhaul towards enhanced efficiency and competitiveness. — Photo tapchitaichinh

HA NOI (Biz Hub) — The rapid integration requires urgent improvement in the legal framework of credit institutions to enhance operation efficiency and competitiveness amid anticipated rising competition, a conference heard yesterday.

Nguyen Hong Son, principal of the Economics University under the Viet Nam National University, Ha Noi said that along with the economic integration, many foreign lenders would penetrate the domestic market offering various choices in banking services for customers.

To date, Viet Nam participated in 15 bilateral and multilateral trade agreements, ranking fifth among 10 ASEAN member countries. In terms of the foreign trade-to-GDP ratio, or trade openness ratio, Viet Nam ranked second in the ASEAN region.

This required local commercial banks to be well prepared for integration through hastening of restructuring to develop a healthy banking system with safe credit operations and improved capacity of raising social resources for efficient investments, Son said.

According to the State Bank of Viet Nam (SBV), the banking sector during the past five years was in a drastic overhaul towards enhanced efficiency and competitiveness.

However, the progress was not as rapid as expected, SBV's Deputy Governor Nguyen Kim Anh said.

He said that the international economic integration efficiency remained low and the renovation progress remained slow, adding that the legal framework needed to be improved together with a strategy to be raised to cope with potential shocks to arise from more intensive integration.

According to Trinh Minh Anh, deputy chief of the Office of the Interdisciplinary Steering Committee for International Economic Integration, local commercial banks must improve their capital, technologies and management capacity to enhance service quality and better meet customer demands, as fierce competition was expected from foreign rivals.

Nguyen Huu Nghia, chief inspector at the central bank, said that commercial banks should focus on their core businesses while reducing their businesses in risky sectors. — VNS