State Bank strongly abolishes sub-licenses

The Governor of the State Bank of Vietnam (SBV) has issued nine circulars, abolishing many business conditions in the banking sector.

Immediately after issuing an action plan to improve the business environment, last weekend, the Governor of the State Bank of Vietnam (SBV) simultaneously issued 9 circulars, abolishing many business conditions in the banking sector.

Illustration: Internet

Cut out many unnecessary business conditions

The prompt action of the State Bank of Vietnam right before the Investment Law 2014 and Enterprise Law 2014 take effect is highly appreciated by commercial banks and economic experts. Because according to the newly issued circulars, many business conditions or sub-licenses have been abolished.

Specifically, circulars such as Circular No. 13/2016/TT-NHNN, Circular No. 14/2016/TT-NHNN, Circular No. 15/2016/TT-NHNN... are all amended in the direction of simplifying administrative procedures, abolishing many regulations related to business conditions, such as regulations related to conditions for lending abroad; some contents on conditions for entrustment, acceptance of entrustment, conditions for performing factoring activities of credit institutions, foreign bank branches...

The State Bank of Vietnam affirmed that this amendment is to ensure compliance with the effective implementation of the 2014 Investment Law on conditional investment and business sectors and Resolution No. 19/2016/NQ-CP of the Government.

The pioneering move by the State Bank of Vietnam to reduce business conditions has been highly appreciated by banks. Mr. Le Quang Trung, Deputy General Director of VIB Bank, said: "This will help banks reduce time and costs for administrative procedures, thereby improving business efficiency."

Agreeing with this opinion, Dr. Can Van Luc, Director of BIDV Training Center, said that cutting unnecessary administrative procedures and business conditions will also create conditions for banks to reduce operating costs, thereby reducing interest rates.

Before cutting a series of sub-licenses, last week, the State Bank issued the Action Plan of the banking sector to contribute to improving the business environment, enhancing national competitiveness, supporting and developing enterprises in 2016-2017, with a vision to 2020. Accordingly, the Governor of the State Bank set a target for the entire sector to improve the National Credit Access Index, while urging credit institutions to innovate lending processes in the direction of simplifying loan procedures while still ensuring loan safety and compliance with legal regulations...

Gold business is not happy

Meanwhile, gold businesses are not satisfied because there is no circular related to the gold sector. Last week, the Vietnam Gold Business Association sent a dispatch to the Prime Minister requesting the removal of many sub-licenses in this field. According to the Association, there are many activities that are not prohibited but in reality, they are like being prohibited due to a series of sub-licenses.

For example, according to current regulations, gold businesses are not prohibited from borrowing capital, importing gold, opening branches, etc. However, in reality, businesses producing gold jewelry and fine arts are almost blocked due to a series of sub-licenses. Therefore, for more than 4 years, no business has been able to borrow capital to produce and trade gold jewelry and fine arts, and for nearly 5 years, no gold business has been allowed to import raw gold.

“Importing raw materials for production is a legitimate requirement of any business in any industry, but for the past 5 years, we have been forced to buy low-quality, floating materials on the market at prices several hundred to a million VND/tael higher than the price of imported gold,” said the General Director of a gold business.

The State Bank of Vietnam has yet to respond to the "complaints" of gold trading enterprises, but a source said that the State Bank's stance is to continue to be cautious with gold. The State Bank of Vietnam is preparing to summarize Decree 24/2012/ND-CP on the management of gold trading activities, and then propose further policies. "The State Bank of Vietnam is the only agency authorized to import gold, and enterprises wishing to import gold need the State Bank's opinion. At this time, we should continue to maintain the above regulations to prevent goldification," said Dr. Nguyen Tri Hieu, a banking expert.

According to baodautu.vn